China Launches New Sea Route — A Blow to the Egyptian Economy

A Chinese container ship set sail over the weekend for Europe on a route passing through the North Pole. This is a first-of-its-kind step for China, allowing it to avoid passing through the Suez Canal and shorten the journey by half. The Chinese decided to use this sea route for the first time following the escalation between the Houthis and the Yemeni army — a conflict that disrupted traffic in the Bab-el-Mandeb Strait, which is controlled by the terrorist organization.

This move is expected to worry two leaders close to Israel — the President of the USA and the President of Egypt. From Donald Trump's perspective, the change in the Chinese route is linked to one of the reasons why he tried with all his might to purchase the island of Greenland. Trump noticed the Russian/Chinese control in the Arctic and wanted to change the balance of power by purchasing the world's largest island. The change in the route strengthens the Chinese presence in the region, after they announced that the move is expected to take place on a regular weekly basis.

From the perspective of Egyptian President Sisi, the move could bury Egypt in a greater economic problem. The use of the Suez Canal by the maritime trade world yields very high profits for Egypt, which collects a toll from every ship that passes in amounts of hundreds of thousands of dollars. Replacing the Chinese trade route with the Arctic sea route will cost Egypt millions of dollars a month, at a time when the country is struggling with endless debts.

From the beginning of April until the end of December, Cairo will have to pay debts totaling about 38.6 billion dollars. This amount represents only the short-term loans that Egypt has taken, while Egypt's total external debt reached about 163.9 billion dollars at the end of last year.