Displacement effect of China on Egyptian textile exports

What is it about?

The purpose of this paper is to empirically measure the extent to which the export growth of Chinese textiles has come at the expense of Egyptian textiles exports in third importing markets. The empirical results suggest that Egyptian textiles are vulnerable to competitive threat posed by China, especially in the EU and US markets. In contact, Egyptian textile exports have moved hand-in-hand with Chinese textile exports to Asian markets. Trade agreements that Egypt signed with the world countries have given Egypt a competitive edge in major importing regions and mitigated the negative impacts of China in the post-2005 period.

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Why is it important?

The contribution of this paper is twofold: first, it adds to the growing literature aiming to understand the impacts of China’s growth on developing countries exports by providing a case study of Egyptian textile export sector. Second, the policy implications drawn from this paper could be useful to Egyptian policy makers and stakeholders to address and respond to the competitiveness challenges posed by China to the Egyptian textile industry.