A Chinese State-backed entity is in talks to help build an investment zone in Egypt, a report said yesterday, as the Asian giant seeks greater access to markets in Europe, Africa and the Middle East.

Cairo is negotiating with the Tianjin Economic-Technological Development Area (TEDA) to build a similar model near the southern approaches to the Suez Canal, the Financial Times said, citing Egypt's investment minister.

Under Egyptian law, the Chinese entity will be allowed to take a 49 percent stake in the 1.5-billion-dollar Suez Economic Zone, it said.

"SEZone is going to be the first of its kind linked to a big investor," the Egyptian minister, Mahmoud Mohieldin, was quoted as saying.

"The final negotiations will hopefully be taking place very soon."

Repeated phone calls to TEDA went unanswered.

China's interest in the manufacturing-focused Suez Economic Zone may be in part due to the large number of preferential trade agreements that Egypt has with Europe, Africa and the Middle East, the report said.

TEDA, which has secured major investments from multinational companies such as Akzo Nobel, IBM and Toyota, is expected to set up its first marketing office for the new Egyptian zone in June, it said.

Mohieldin said he expected the area to attract up to 3.5 billion dollars in investment in the first three years of operation.

In recent years China has been investing heavily in Africa and the Middle East in return for access to natural resources needed to fuel its energy-hungry economy.

Tarek Kamel, Egyptian minister for communications and information technology, said China's involvement in the Suez Economic Zone would benefit both sides.

"We want (the Chinese) to create jobs for Egyptians," Kamel was quoted by the Financial Times as saying.

"They can use the growth of the market and enjoy the growth but also help us with our social-economic development."

Source: AFP, March 3