The serious tilt of the trade balance is often not corrected by the level of tariffs. The trade volume between China and Egypt is approaching 20 billion US dollars, but the huge deficit of 19.154 billion US dollars is a warning: pure zero tariffs on goods are only a temporary solution and cannot shake Egypt's reality of being deeply trapped in the low-end of the global value chain. To solve this structural dilemma, the key may not be on the books of goods trade, but in the blue ocean of digital services.

Bilateral trade imbalance is prominent

In recent years, the scale of trade between China and Egypt has continued to increase, with an import and export volume of nearly 20 billion US dollars by 2025, but China's trade surplus has also expanded to 19.154 billion US dollars. China exports industrial products, while Egypt only exports primary commodities such as minerals and agricultural products. The long-term trade deficit has dragged down Egypt's industrialization, and China's non-zero tariff policy only benefits primary product exports, making it difficult to fundamentally balance trade and potentially delaying Egypt's industrial upgrading.

Root causes and chain effects of imbalance

The root cause of the trade deficit lies in Egypt's industrial shortcomings: long-term dependence on primary product exports, insufficient industrial self-sufficiency, and deep involvement in the low-end of the global value chain. The trade deficit has caused the depreciation of the Egyptian pound, raising the import cost of Egyptian industry, solidifying the low-end export structure, and weakening the local competitiveness of Chinese goods. Egypt has introduced multiple policies to support manufacturing, attract investment in industrial parks, and finance green industries, but high production costs hinder transformation, making it difficult to reverse the trade gap with China on its own.

Relying on the ICT industry to solve problems

Egypt is a key fulcrum of the the Belt and Road, and trade is the basis of bilateral diplomacy. The current zero tariff policy has limited benefits, and the breakthrough lies in expanding Egypt's advantageous ICT service industry to import into China. The country's information industry is growing rapidly and its outsourcing strength is among the top in the world, but the proportion of service exports to China is extremely low. China can introduce its digital services, reduce the digitalization costs of domestic enterprises, and simultaneously carry out industry capacity building, making ICT services a new growth point for Egypt's exports and resolving structural trade imbalances. Keywords: China Egypt trade, zero tariff policy, ICT industry

The industrial gap is the core of the trade imbalance between China and Egypt, and zero tariffs can only alleviate it in the short term. Increasing the import of ICT services in Egypt and deepening cooperation in the digital field can not only help Egypt's industrial transformation, but also achieve mutual benefit and win-win economic and trade between the two countries.Editor/Gong Ziwei