Turkey, Egypt vie for Chinese investment

Hi readers,  

China used last weekend’s Shanghai Cooperation Organization (SCO) summit in Tianjin to spotlight the bloc’s growing reach beyond Eurasia. From Egypt's and Turkey’s business deals with Beijing to Iran’s diplomatic maneuvering, the summit made clear that the region sits squarely within China’s orbit. 

The SCO, once a Eurasian security bloc, is now a stage on which Beijing courts Middle Eastern partners frustrated with Western pressure and eager for investment.  

Let’s unpack,  

Rosaleen Carroll (@roscarroll_) 

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Leading this week

For Egypt, Turkey and Iran, this year’s SCO summit was less about security coordination and more about securing investment and political backing. 

➡️ Egypt: Prime Minister Mostafa Madbouly secured Chinese pledges of more than $1 billion in investment for renewable energy and water desalination projects. Egypt’s government wants renewables to reach 42% of energy production by 2030 and is racing to expand desalination capacity, positioning China (also its largest trading partner) at the center of these goals. 

➡️ Turkey: President Recep Tayyip Erdogan met Chinese President Xi Jinping during his first visit to China since 2019. Turkish and Chinese firms signed energy and financing deals, including a $200 million agreement with the Asian Infrastructure Investment Bank and agreed to cooperation on Turkey’s Black Sea gas development. Despite trade spats, like Ankara’s tariffs on Chinese EVs, both sides signaled their intent to deepen ties. 

➡️ Iran: President Masoud Pezeshkian used the summit, and a follow-up meeting with Xi in Beijing on Tuesday, to rally opposition against the UN snapback sanctions process initiated by France, Germany and the UK last week. Along with Russia and China, Iran signed a joint letter disputing the legality of the European move. Xi publicly backed Iran’s right to civilian nuclear energy, giving Tehran diplomatic cover as it faces the possibility of renewed international sanctions.  

A broader view 

For some Middle Eastern states, SCO engagement is less about security guarantees (unlike NATO, for example) and more about economic and diplomatic positioning. 

Egypt is using its engagement with China to diversify its economic and strategic partnerships. Beyond securing investments in renewable energy and water infrastructure, Cairo sees Beijing as a partner for financing large-scale development and expanding Egypt's regional influence even as it continues to rely heavily on the United States for military aid, of which it receives $1.3 billion annually, and security cooperation.

Turkey used the SCO gathering to deepen economic ties with Beijing while continuing its balancing act between East and West. Turkey’s ambition to become a full member of the SCO — as expressed by Erdogan in 2022 — reflects a desire to diversify Turkey’s partnerships even as it has long vied to join the EU and is a NATO member.

Plainly speaking, Erdogan seems to want to have his cake and eat it too. The SCO offers Ankara access to Chinese investment and technology, which is particularly valuable given domestic economic pressures, including high inflation and the need for industrial growth. Notably, in 2024 Chinese EV maker BYD announced a $1 billion investment in a car factory in Turkey, just a month after Ankara granted BYD exemption from a 40% tariff on Chinese EVs.

Iran, for its part, approached the summit with a sense of urgency. With snapback sanctions likely to return within weeks, Tehran used the gathering to demonstrate that it is not isolated globally and that it still enjoys diplomatic cover from Beijing and Moscow. Pezeshkian’s meeting with Xi and the joint China-Russia-Iran letter rejecting the legality of snapback sanctions reinforced Iran’s message that Western pressure will not go unanswered. The SCO offers Iran not only solidarity but also a mechanism through which it can maintain economic and political engagement at a time when sanctions and strained relations limit its access to Western-led forums and investment initiatives.

In this pool photograph distributed by the Russian state agency Sputnik, Russia's President Vladimir Putin, Chinese President Xi Jinping, his wife Peng Liyuan and foreign leaders pose during a family photo of the Shanghai Cooperation Organization (SCO) Summit in Tianjin on August 31, 2025. 

Rosaleen’s take: The Tianjin summit highlighted how the SCO is evolving into a stage for China’s Middle East diplomacy. For Beijing, the region seems a natural extension of the Belt and Road Initiative: rich in energy, strategically located and politically receptive to multipolar rhetoric. The SCO provides a platform on which China can court partners and project an alternative model of global governance, one that emphasizes state-led investment and multipolarity rather than the security-focused liberal order championed by the United States, NATO and the EU. 

At the summit this year, the SCO's member states agreed on the establishment of an SCO development bank, something Chinese leadership has long hoped for as a way to rival the US-led global financial order. In a speech at the summit, Xi called for the bank to be set up "as soon as possible to provide stronger underpinnings for security and economic cooperation among member states." The prospect of such a bank is significant, but whether it materializes remains uncertain. 

But the bloc has limits. The SCO is still far from replacing Western institutions; it lacks enforcement tools and internal rivalries remain. For now, the SCO resembles a diplomatic stage: a place where China can host leaders as well as sell and contrast its approach with the West’s. Its symbolic function shouldn’t be underestimated, however, especially as US engagement in international forums and institutions recedes. 

For more on the SCO, check out the latest edition of the Al-Monitor Brief, where Adam Lucente and I discuss what the summit meant for the Middle East.

Photo of the week

Soldiers rehearse prior to the military parade marking the 80th anniversary of victory over Japan and the end of World War II, in Tiananmen Square on Sept. 03, 2025, in Beijing, China. (Photo by Kevin Frayer/Getty Images)

Deals and visits ✈️

• Saudi investment minister signs MoU with Hong Kong BRI office
• China hosts 7th China-Arab States Expo in Yinchuan
• Omani bank Sohar weighs Hong Kong or China expansion
• Saudi-backed gaming company seeks China deals  
• After SCO, Iranian president attends Chinese military parade in Beijing
• Chinese auto electronics firm to establish subsidiary in Morocco with $65 million investment
• Chinese, Omani companies to launch EV joint venture
• UAE consultancy firm partners with China’s Hyperchain to advance blockchain infrastructure 

What we are reading​​

• Lasers, hypersonic missiles and the ‘nuclear triad’: China flexes its military muscle: Financial Times
• A hidden camera protest turned the tables on China's surveillance state: The New York Times
• China is using the private sector to advance military AI: The Wall Street Journal