Investment Boom of Chinese Textile Companies in Egypt: A Strategic Move of $4.8 Billion to Reshape the Global Supply Chain Chessboard

In December 2025, the "global expansion" map of China's textile and chemical fiber industry welcomed a landmark development. Within a short period, three leading companies in the sector—Xinfengming Group, Jasan Group, and Fountain Set Holdings—announced major investment projects in Egypt one after another, with a combined investment exceeding $4.8 billion (approximately RMB 34 billion). This is not a scattered layout but a clear-cut, cluster-style, and strategic shift, marking Egypt's rise from a potential investment destination to a new core hub for the globalization of China's textile industry.

The investments of the three companies each have their own focus, yet together they paint a complete strategic picture. Xinfengming plans to build a project producing 300,000 tons annually of differentiated functional fibers, aiming to capture the high ground in high-end upstream raw materials. Jasan Group is focusing on expanding its core production capacity for cotton socks and seamless apparel to consolidate its manufacturing advantages. Meanwhile, Fountain Set Holdings, as one of the world's largest knitted fabric manufacturers, will further strengthen the vertical supply chain through its investment. The core logic behind choosing Egypt lies in its irreplaceable geographical and trade advantages: as the gateway to Africa, it enjoys various duty-free or preferential trade agreements for accessing markets in the European Union, the United States, Africa, and Arab countries (such as the Qualified Industrial Zone agreement with Europe and the African Growth and Opportunity Act, AGOA, with the United States). This effectively helps circumvent the increasingly stringent tariff and non-tariff barriers imposed by Europe and the United States on Chinese products in recent years, achieving the goal of "Made in Egypt, Sold Globally."

The deeper motivation behind this investment boom stems from the dramatic reshaping of the global industrial chain and the intrinsic upgrading needs of China's textile industry. First, this is a proactive response to the "China+1" global procurement strategy. To diversify risks, international brands require suppliers to have production capacity outside China. Establishing factories in Egypt has become an inevitable choice for Chinese enterprises to retain and expand their global market share. Second, it aims to optimize the comprehensive cost structure. Although challenges exist in local operations and labor training in Egypt, its advantages in energy costs, tariff exemptions, and logistics efficiency to key markets form a competitive combination compared to purely China-based manufacturing. More importantly, this represents an upgrade for China's textile industry from merely exporting products to a model of systematic output of "technology, standards, and production capacity," enhancing its control in the global value chain.

The cluster actions of leading companies carry strong indicative significance. They signal that the internationalization of China's textile industry will transition from the past sporadic, "order-driven" factory setups to a new phase of "strategic-layout-driven" capacity relocation. Supporting enterprises in the middle and lower reaches of the industrial chain are likely to follow suit, potentially forming a new Chinese textile industry ecosystem in Egypt and surrounding regions in the future. This shift will not only alleviate domestic pressures related to environmental protection, resources, and labor costs but also drive the entire industry to climb toward higher value-added sectors through the integration of global quality resources.

The investment boom in Egypt at the end of 2025 represents a crucial strategic decision made by China's textile and chemical fiber industry in response to geopolitical shifts and the global competitive landscape. It is not merely a geographical relocation of production capacity but a profound reflection of the industry's efforts to reallocate resources globally, mitigate risks, and seek new growth poles. The placement of this strategic "chess piece" is redrawing the competitive map of the global textile industry and marks a solid step in China's transformation from the "world's factory" to a "dominant player in global manufacturing networks."