Beijing's Cautionary Engagements in the Eastern Mediterranean

Syria to Türkiye and Egypt to Israel, how Beijing is navigating one of the world's most complex geopolitical realms.The Eastern Mediterranean has long been a magnet for external powers due to its strategic position. China is increasingly encroaching in the region today, but largely through the economic route, although its tempo is measured and calculated.

Nation after nation across the region, all the countries of the Eastern Mediterranean have a deficit in trade with China—a consequence of Beijing's worldwide trade surplus. But it only starts there. The economic footprint of China is growing incrementally.

Egypt: Hub of Chinese Investment

China's footprint is especially strong in Egypt. Chinese firms have invested heavily on both sides of the Suez Canal, with a vast industrial park in between. The park has been accused of having some of the negative characteristics of Chinese investment: state aid, environmental desecration, and exploitative working practices. This has prompted European glass fiber manufacturers to file anti-dumping charges against Chinese plants in the park.

By March 2025, Chinese investment in Egypt had surpassed more than \\$7 billion, and the pipeline is not easing. Deals include a central business district in Egypt's new administrative capital, a 1.1GW wind farm in the Gulf of Suez, and a \\$5.1 billion export-grade ammonia plant. Chinese auto maker BAIC also has plans to construct an electric vehicle (EV) factory in Egypt.

Türkiye: A Strategic Production Base

Chinese foreign direct investment in Türkiye remained at $9 billion in 2023. Investments range from a terminal in Ambarlı port to transport infrastructure, telecoms, and e-commerce. Chinese policy lenders are also involved in lending to Turkish institutions. Ankara and Beijing signed a currency swap agreement in 2019 that was meant to boost Türkiye's thin foreign currency reserves.

Its customs union agreement with the European Union, which has been in force since 1995, is also a main source of Chinese interest. It allows Chinese manufacturers to use Türkiye as an entry point into Europe. BYD is already due to open a $1 billion EV plant, and another Chinese carmaker, Chery, is reported to be preparing a similar move.

Israel: From Cooperation to Caution

China and Israel have collaborated closely on technology and trade for decades. Haifa Bay is home to a terminal belonging to a state-owned Chinese firm, which has raised eyebrows among the U.S. Chinese firms also have a monopoly in Israel's green tech and EV industries.

But tensions have arisen since the October 2023 Hamas attack and Beijing's neutral stance on the issue. The step has fueled growing skepticism within Israel about the use of Chinese technology in sensitive domains. National security debates increasingly revolve around Chinese-made cameras, drones, and EVs used by the Israeli defense forces and police.

Limited Footprints Elsewhere

In Lebanon, Chinese investment is confined to its active ambitions and restrained by Beirut's delicate balancing act between Western aid and running the risk of sinking into debt dependence on China. In Cyprus, Chinese investment is largely marked out in real estate and hotels, with massive investment in hotels and a casino.

In Greece, Chinese COSCO is the dominant owner of Piraeus port and a 24% stakeholder in the national high-voltage electricity grid operator, further consolidating its foothold in this EU member country.

Seeking Alternatives: Alternative Trade Routes through the Eastern Mediterranean

Geopolitical disruptions forced China to reassess its global logistics. The war in Ukraine decreased the railway traffic via Kazakhstan and Russia by 40%, and Red Sea tensions complicated the route further. These challenges revived the Middle Corridor, a route that avoids Russia and the Red Sea, as a Chinese interest.

The Middle Corridor utilizes the Trans-Kazakhstan Railroad and the Baku-Tbilisi-Kars railway to reach Türkiye and beyond. It offers Beijing a new southern route apart from traditional trade routes.

China's new interest in this corridor also explains the revival of the China-Kyrgyzstan-Uzbekistan railway as part of China's overall Central Asian policy to access the Caucasus and the Black Sea. Meanwhile, a Chinese consortium is building a deep-sea port at Anaklia, Georgia, with implications that Beijing is seeking to diversify away from sole reliance on Türkiye.