China's Belt and Road Initiative: Risk Outlook China's Belt and Road Risk Outlook | Page 14

EGYPT AT THE CENTRE
Egypt stands at a critical juncture of the Maritime Silk Road, the Suez Canal forming the main
transit point between the Indian Ocean and the Mediterranean Sea. Without Egypt’s partnership, the
entire “Road” section of the BRI is redundant; fortunately for Xi, Egyptian President Abdel Fattah el-Sisi
has expressed a keenness to make his country a “pivot” for the project.
The planned expansion of the China-Egypt Suez Economic and Trade Cooperation Zone is set to take a
decade to complete and over $230 million in financing, at the same time as Egypt undertakes its own
internal economic reform. An industrial zone of 7.23 square kilometers in Ain Sokhna on the Red Sea
coast well underway; the first phase has been completed and successfully attracted investment from
some 68 enterprises.
A memorandum of understanding has already been signed between the two leaders, with China
promising an additional $1 billion in financing for Egypt’s central bank and $700 million in loans to the
National Bank of Egypt. China has been less than subtle about its intentions in ensuring regional
stability, labelling itself the “new” choice as Middle Eastern relationships with the US sour ever further.
KENYA HOLDS THE KEY
CHINA'S AFRICA STRATEGY:
OUTLOOK FOR 2018
At the inauguration of a new railway line connecting
Despite the fanfare, 2018 presents very real challenges
Kenya’s capital, Nairobi, and the coastal Mombasa
to Chinese attempts to secure alliances throughout the
African continent. Local discontent with rising Chinese city earlier this year, Kenyan President Uhuru
influence will need to be managed effectively; commodity Kenyatta hailed the p roject as ushering in a “new
prices and rising debt levels are also a concern along the
chapter” for the country. Funded by Chinese money,
entirety of the BRI, and Africa is no different.
the railway is the largest project since Kenya
Africa is wary of colonial-style inflows, and China must achieved independence in 1963, as ties with China
constantly manage domestic perceptions and ensure evolve in line with the government’s new focus on
stability if BRI projects are to succeed in the long-term.
multifaceted engagement.
China’s propensity to hire Chinese firms and Chinese
workers on overseas infrastructure investments has not
gone unnoticed. Paired with a never-ending, and seemingly Under the former President Mwai Kibaki, Kenya
unquestioning, line of credit from Chinese banks to African launched a deliberate policy to distance itself from
governments, the question of repayment is less sexy than
traditional investment partners in Europe and the
the overall BRI hype - but no less important. 
US, instead resolving to “Look East”. Since then,
China has formulated several major projects in the
A pervasive infrastructure deficit in Africa has not emerged
simply out of a global blindspot; there are broader societal
country, including a 50-kilometer, eight-lane
and political barriers at play that China’s cash-heavy
highway linking Nairobi to Thika (inaugurated in
approach may be failing to address. China’s disinterest in
ensuring the transparency of local governance may November 2012) in addition to the Nairobi-
ultimately backfire, exacerbating existing fragility instead of Mombasa railway. With projects well underway in
ensuring the stability China so desperately seeks.
Tanzania, Nairobi holds the key to China’s
expanding network among Africa’s southern states.
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