Xi’s first trip to the Middle East in four years comes as US partners in the region reassess their strategic relationships after months of conflict that have disrupted trade, shaken economies and raised questions about Washington’s long-term role.

Egypt, itself a major US defence partner that receives around $1.3 billion annually in military aid from Washington, has been steadily increasing economic and military cooperation with China in recent years.

Welcomed by President Abdel Fattah al-Sisi with a military ceremony in Cairo, Xi said countries in the region should be “masters of their own destiny” and explore a new regional “security architecture”, according to China’s state news agency Xinhua.

Xi also said China was ready to work with regional countries to safeguard shipping routes, an issue that has taken on greater importance after conflict disrupted traffic through the Strait of Hormuz and Bab al-Mandeb.

The leaders agreed to deepen security cooperation and counterterrorism coordination, Xinhua said. The two sides also agreed to expand cooperation in data centers, semiconductors and critical metals supply chains and strengthen the use of each other’s currencies in trade and investment, according to a joint statement.

‘Strategic balance’

For Egypt, stronger ties with China fit a broader effort to diversify international partnerships. In an article published ahead of the visit, Sisi said Egypt pursued a policy of “strategic balance” at a time of growing global rivalry.

“Egypt wants to widen the circle of its relations with major world powers, including China,” former Egyptian diplomat Ayman Zaineldine told Reuters.

“So the visions converge.”

For China, Egypt’s regional influence and strategic location make it an important partner as Beijing seeks a broader economic role and tries to chip away at US influence in the region.

“Egypt represents something quite valuable to Beijing — a large domestic market for investment opportunities, and a lot of diplomatic weight in the region, including the Palestine question, as well as connectivity to Africa,” said H.A. Hellyer, a scholar at the Royal United Services Institute think tank.

Growing military ties were on display last month during Egypt’s “Eagles of Civilisation” exercises with China, which included a rare air combat drill involving Chinese-made J-16 jets and French-made Rafale aircraft.

Enthusiasm for the Chinese president’s visit has been evident for days in Egypt’s capital, where streets have been decked out in Chinese flags and images of iconic sites including Egypt’s Sphinx and China’s Great Wall.

Economic ties expand

Home to the Suez Canal and a population of more than 110 million, Egypt is an important market for China, importing some $10 billion of Chinese goods in the first half of this year alone.

Chinese investment has risen rapidly since Sisi visited China and signed a strategic partnership agreement in 2014, with Chinese companies pouring billions into container ports, green hydrogen projects and facilities to make iron pipes, car tyres and satellites.

Egypt’s cabinet says the Suez Canal Economic Zone has attracted about $4 billion in Chinese investment.

On Wednesday, Egyptian authorities announced plans to expand a Chinese-developed industrial area in the zone, while ZC Rubber Group signed a preliminary agreement to study a $500 million tyre making complex.