Opinion | China’s growing North Africa presence a structural challenge for Europe

China’s investments in North Africa have intensified in 2026, building on long-standing Belt and Road Initiative frameworks while accelerating amid the US-Israeli war with Iran.

With 40-50 per cent of China’s seaborne oil imports traditionally passing through the Strait of Hormuz, which is now blocked to most container traffic, Beijing has sought to diversify energy sources away from Gulf Arab states.

For more than a decade, Beijing has pursued deeper engagement across the Middle East and North Africa as part of its Belt and Road Initiative, seeking to secure energy supplies and build infrastructure corridors linking Asia to Europe and Africa. Africa-wide engagement in China’s infrastructure initiative hit US$61.2 billion in 2025. This year, however, the scale and urgency of China’s activities in North Africa have been shaped in part by heightened geopolitical instability in the Gulf.

China’s economic engagement in North Africa is driven by three main pillars: energy security, infrastructure development and industrial expansion. In 2026, all three have intensified. Algeria has become increasingly important as a supplier of oil and natural gas by leveraging its Opec status and stability for China’s diversification.

Accordingly, Chinese state-owned enterprises have expanded into upstream investments, participating in pipeline and liquefied natural gas (LNG) projects. For example, a 2025 agreement between Algerian oil and gas firm Sonatrach and China’s Sinopec has expanded into shale gas exploration on the 36,000 sq km Guern El Guessa II block, aligning with Beijing’s upstream energy push. Chinese firms have received an estimated US$70 billion in Algerian contracts in the past two decades.

At the same time, China is not solely focused on hydrocarbons. Renewable energy has emerged as a major area of cooperation, particularly in Morocco. For instance, several recent deals there added green aluminium, solar and wind production through large Chinese state-owned power companies.

Egypt’s vast deserts have similarly attracted Chinese clean energy investment. Egypt secured US$1.8 billion in renewable energy deals in January, among them an agreement with Chinese solar power manufacturer Sungrow to make energy storage batteries in the Suez Canal Economic Zone.

These initiatives serve a dual purpose. They support host countries’ development goals while positioning Chinese firms as dominant players in the global clean energy value chain.

Infrastructure development remains another key dimension of China’s regional presence. Egypt occupies a particularly strategic position given its control of the Suez Canal. Chinese investment in industrial zones along the canal, as well as port and logistics infrastructure, has expanded in the last few months, reinforcing Egypt’s role as a hub linking Asia, Africa and Europe.

Chinese industrial investment has also grown, particularly in manufacturing sectors such as automotive assembly, electronics and construction materials. In this regard, Morocco has emerged as a regional manufacturing hub anchoring green hydrogen and electric vehicles, benefiting from its proximity to European markets and relatively stable business environment.

Chinese firms are leveraging this position to establish production bases that can serve both African and European consumers. Gotion High-Tech’s US$1.3 billion Kenitra gigafactory is expected to begin production in the third quarter of this year, drawing in Chinese firms such as BTR New Material Group and Hailiang Group. These investments reflect a broader trend of supply chain reconfiguration, accelerated by geopolitical tensions in the Middle East and other regions.

The European Union has responded to China’s expanding economic presence in North Africa with a mixture of cautious engagement and strategic concern. For Brussels, North Africa – in particular Morocco, Algeria, Libya, Tunisia and Egypt – constitute a vital neighbouring zone with direct implications for European energy security, migration management and trade connectivity.

A central EU concern relates to strategic infrastructure and connectivity. Chinese investment in ports, logistics hubs and industrial zones across North Africa is viewed in Brussels through the lens of influence over key supply chains linking Europe to Africa.

Projects tied to the Belt and Road Initiative, particularly around the Mediterranean, raise fears that European companies could be sidelined in their traditional near-abroad and that dependency on Chinese-built infrastructure could expand into sectors that are critical for trade and digital connectivity. While the EU has not officially opposed such investments, there is a growing emphasis on ensuring transparency, regulatory alignment and debt sustainability in regional partner countries.

Energy security is another key dimension shaping the EU’s reaction. In the wake of the Iran war and broader instability in global energy markets, North Africa has gained renewed importance as a supplier of natural gas to the bloc and a partner in renewable energy development.

The EU has been actively strengthening energy ties with Algeria and promoting green energy cooperation with Morocco and Egypt. Nevertheless, there appears to be recognition within the EU that outright competition with China in North Africa is neither feasible nor desirable in all areas.

As a result, the EU’s approach increasingly combines selective cooperation with strategic hedging, engaging with China where interests align while simultaneously reinforcing its own economic and political presence. In this context, China’s growing role in North Africa is seen less as an immediate threat for the EU and more as a structural challenge that requires a sustained, coordinated European response.