An Empirical Research on the Impact of China's Financial Aid to Egypt and its Effect on Egyptian Economy

Abstract

China’s assistance supports Egypt’s political independence efforts, Egypt’s economic growth, and China’s efforts to build a positive international reputation as a major power. This research investigates if China’s financial support for Egypt can advance Egypt’s economic growth. China’s financial assistance to Africa is referred to as financial aid throughout this essay. This work uses the systematic GMM for econometric regression method for the empirical research portion. Study the effects of China’s overall financial support for Egypt on GDP first, and then analyze the effects of loan assistance, free aid, and investment help on GDP of Egypt. The findings of the study indicate that China’s financial assistance to Egypt has a sizable positive impact on its GDP and industrial added value. Among these, the loan assistance method significantly contributes to the GDP of Egypt with a medium level of economic growth, and the free aid method significantly contributes to the GDP of Egypt with a low level of economic development.