Exploring Egypt‐China bilateral trade: dynamics and prospects

Abstract

PurposeBilateral trade between Egypt and China has expanded substantially in recent years. Few studies however have focused on the understanding of this trade relationship. The purpose of this paper is to fill a void in the literature by examining and understanding the two countries' trade pattern.Design/methodology/approachIn order to achieve the objectives of the paper, and in the light of the pool of literature and availability of data, the authors relied on qualitative methods to analyze the composition of trade between Egypt and China. In addition, the authors employed trade intensity index, intra‐industry trade index, and examined the trade complementarity to capture the dynamics and perspectives of bilateral trade between the two countries.FindingsResults show low values in Egypt's trade intensity index, implying that Egyptian trade with China is less than it should be. The low values of the intra‐industry trade index suggest smaller trade between the two countries' firms in the same industry. The study clearly shows that there are few areas where there is an overlap in the two countries' comparative advantage. The trade complementarity analysis tends to suggest that the complementarity for China to export to Egypt is increasing, while that for Egypt to export to China is declining.Originality/valueGiven the lack of research that examines and compares trade between the two countries, the paper provides an in‐depth understanding of the patterns of trade between them and the driving forces behind such dynamics, which is pertinent to best capture the opportunities presented by the Chinese market. Also, the findings can be used to draw policy implications for promoting future trade and cooperation between Egypt and China.