Chinese President Xi Jinping arrived in Egypt on Tuesday for his first trip to the country in a decade, as Egypt and China mark 70 years of diplomatic relations.
The anniversary is a major reason for the visit, but the timing adds another layer to it.
The region is going through another period of heightened tension following renewed fighting between the United States and Iran. Attacks have extended beyond Iran’s borders, shipping through key waterways has come under pressure, and Washington is increasing economic measures connected to Tehran.
At the same time, China has significant economic interests in the region, while Egypt sits at the intersection of some of its most important trade routes and diplomatic relationships.
So, what does Xi’s visit have to do with the current Iran crisis?
Quite a bit.
The Iran War Has a Wide Regional Impact
The latest escalation has extended beyond the immediate U.S.-Iran confrontation, with attacks reported in and around several Gulf countries.
Egypt has called for restraint and warned about the wider effects of continued escalation, reflecting a broader concern shared by countries across the region: the longer the conflict continues, the greater the potential impact on security, trade and regional stability.
For Egypt, the situation is particularly significant because of its location.
The country borders several areas affected by ongoing conflicts and sits along one of the world’s most important trade corridors.
That brings us to the Suez Canal.
The Suez Canal’s Becoming Increasingly Important to China
The conflict has also put renewed attention on the Strait of Hormuz, a crucial route for global energy shipments.
When movement through Hormuz becomes more difficult, other routes become more strategically important — including the Suez Canal, which connects the Red Sea to the Mediterranean.
For China, this is not a small detail.
China is heavily involved in Middle Eastern trade and remains an important buyer of energy from the region. Any disruption to major shipping routes can therefore have wider consequences for Chinese businesses and supply chains.
Egypt’s control of the Suez Canal gives it a particularly important position in that equation.
The current crisis has made Egypt’s geographic importance even harder to overlook.
China Has a Lot at Stake in the Iran Crisis
Beijing also has a direct interest in how the situation develops.
China has maintained significant economic ties with Iran and is a major buyer of Iranian oil. At the same time, Beijing has increasingly presented itself as a diplomatic actor in the Middle East, including through its role in helping restore relations between Saudi Arabia and Iran in 2023.
That leaves China with several interests to balance: maintaining economic relationships, supporting regional stability and protecting the trade routes on which its economy depends.
As the United States increases economic pressure on Iran, those interests become even more relevant.
And that is where Egypt enters the picture.
How the Conflict Is Affecting Regional Finance
The latest U.S. measures show how the economic side of the conflict can affect institutions outside Iran.
In August, the U.S. Treasury proposed restricting the UAE operations of Egypt’s Banque Misr from accessing U.S. correspondent banking services over what Washington described as transactions connected to Iranian financial networks. The measure applies specifically to Banque Misr’s UAE operations, rather than the bank’s headquarters in Egypt.
Egypt and the UAE have since said their central banks are coordinating regarding Banque Misr, while the bank said it would take the necessary measures to continue its business as usual.
The episode is an example of how the economic consequences of the Iran conflict can extend into the wider regional financial system.
For countries with commercial links across the region, managing those relationships while complying with different financial requirements is becoming increasingly important.
Egypt Has Reasons to Maintain Multiple Partnerships
Egypt has a long-standing strategic relationship with the United States, including extensive military and security cooperation.
At the same time, Cairo has expanded its economic and diplomatic relationships with China, Russia, Europe and other international partners over the past several years.
Egypt has interests with multiple major powers — and that maintaining those relationships can be useful in a region where economic and security conditions can change quickly.
China is particularly important in this picture because its relationship with Egypt has expanded considerably in recent years.
China Wants to Deepen Its Ties With Egypt
And Egypt offers China something beyond its economy.
It offers access to a country with considerable regional diplomatic weight.
Egypt has relationships with a wide range of regional and international actors and has historically played a role in diplomatic efforts surrounding conflicts in the region.
That makes Cairo useful to Beijing as China seeks a larger role in Middle Eastern affairs.
China has already taken steps to establish itself as a diplomatic player in the region. Its 2023 mediation between Saudi Arabia and Iran was one of its most prominent examples, while Beijing has also maintained ties with the Palestinian Authority and supported a two-state solution.
Egypt fits into that broader diplomatic approach.
For China, strengthening ties with Cairo means strengthening ties with a country that has influence across several of the region’s most important political and economic networks.
So What Will Xi and Sisi Discuss?
Xi is meeting Egyptian President Abdel Fattah El-Sisi on Wednesday, with the two leaders expected to discuss both bilateral relations and wider regional developments.
The Gaza war, Iran and shipping through the Red Sea and Strait of Hormuz are expected to be among the regional issues discussed.
Economic cooperation will also be an important part of the visit, with the two sides expected to announce agreements covering areas of their growing partnership.
That makes the meeting relevant on two levels: what Egypt and China can do together, and how they see the changing regional environment around them.
Ultimately, Xi’s visit comes at a moment when the region’s security, trade and diplomatic relationships are all being tested at once. For Egypt and China, it is an opportunity to strengthen a long-standing partnership while discussing the challenges shaping the region — making the visit significant well beyond its 70-year anniversary.
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