New Delhi, Aug. 20 -- The ancient port of Ain Sokhna, on the Gulf of Suez, once received turquoise destined for the regalia of pharaohs. Now it welcomes a new source of wealth: Chinese manufacturers. In just a few years their investment has transformed the area. Scores of factories have appeared, producing everything from fibreglass to switchgears. In January a new port terminal-built with financing from two Chinese logistics giants, COSCO and CK Hutchinson-began operations.

Ain Sokhna forms part of the wider Suez Canal Economic Zone, a network of industrial parks and ports that stretches north to the Mediterranean. Roughly half the investment it has attracted in recent years has come from China. The factory-building extends far beyond N...