Few waterways are as strategically important or as politically volatile as the Red Sea. Carrying around 12% of global trade, it is under growing strain from conflict and geopolitical competition. Houthi attacks on commercial shipping, Sudan’s civil war and growing rivalry among the US, Gulf states, Türkiye, Russia and China are reshaping the region.

Beijing, however, sees opportunity where others see instability. Even as conflict reshapes the region, China continues to widen its economic reach. Plans to help rebuild Sudan, expand industrial activity in Egypt’s Suez Canal Economic Zone, and strengthen transport links between Djibouti and Ethiopia span different countries and sectors. But analysts say they are increasingly connected by a common strategic logic.

These investments are parts of a broader Chinese strategy, rather than a single, centrally directed master plan, says Pratibha Thaker, regional director for the Middle East and Africa at the Economist Intelligence Unit (EIU). “While each project must meet individual commercial and bilateral objectives, they collectively strengthen China’s position along one of the world’s most important trade corridors,” she tells The Africa Report.

Building influence through commerce

Thaker’s point goes to the heart of China’s Red Sea strategy. Unlike many external powers competing for influence around the Red Sea, Beijing has largely avoided building its presence through military alliances or overt security partnerships. Instead, it has spent more than two decades embedding itself in the region through infrastructure, manufacturing, logistics and trade, creating economic relationships that have steadily expanded its political influence.

The strategy plays out differently across the region. Sudan is better known today for a civil war the UN has described as the world’s biggest humanitarian crisis. But even as the war rages, Beijing is positioning itself for what comes next.

Earlier this month, Sudan signed a memorandum of understanding with China’s China Harbour Engineering Company to modernise its Red Sea ports, upgrading cargo facilities, logistics infrastructure and digital operating systems in a move aimed at restoring Port Sudan as a major regional trade gateway. More broadly, rebuilding the country’s ports, roads, railways and electricity networks is expected to make Sudan one of Africa’s biggest reconstruction markets.

Beijing seeks influence at critical nodes rather than control over the Red Sea as a whole

In Egypt, the focus is manufacturing. Chinese companies have already established a major presence in the Suez Canal Economic Zone, producing goods for European, African and Middle Eastern markets.

Cairo is now pushing that strategy further with plans for a $2bn Chinese-backed logistics and commercial city modelled on Yiwu International Trade City. Officials say the project is designed as a vast trading and distribution hub, with warehouses, showrooms and logistics centres serving markets across Africa, the Middle East and beyond.

Further south, Djibouti has become a cornerstone of China’s Red Sea strategy. Home to Beijing’s only overseas military support base, it has also emerged as a vital logistics hub for the Belt and Road Initiative. Chinese-backed ports, railways, roads and industrial parks connect the country to neighbouring Ethiopia, which routes more than 90% of its trade through Djibouti, creating one of the region’s most important commercial corridors.

“Taken together with China’s commercial infrastructure, railway, free-zone and military presence in Djibouti, these projects point toward a corridor-based approach,” Thaker says. “Beijing seeks influence at critical nodes rather than control over the Red Sea as a whole.”

Federico Manfredi Firmian, a visiting scholar at American University’s School of International Service, sees the same pattern. He argues the projects fit naturally within the Maritime Silk Road, the maritime arm of China’s Belt and Road Initiative.

“Each project has its own commercial rationale, but together they also expand China’s strategic presence along one of the world’s most important trade corridors,” he says.

Djibouti: The blueprint for China’s model

If there is one lesson from Djibouti, analysts say, it is that China’s influence has not emerged through a single grand design. Instead, it has accumulated over years of commercial engagement.

That gradualism distinguishes Beijing from many other external powers operating around the Red Sea. Rather than beginning with security partnerships or military alliances, China has expanded its presence through projects negotiated one investment at a time.

For Thaker, that evolution is central to understanding China’s approach across the Red Sea corridor.

“This does not mean China’s approach is purely commercial or strategically neutral,” she says. “Infrastructure projects create long-term dependence on Chinese financing, technology, contractors and trade networks. They also provide Beijing with access, information and political leverage without requiring formal alliances or a large permanent military footprint.”

Firmian argues that this process rarely hinges on a single flagship project. Instead, influence accumulates over years as countries become increasingly integrated with Chinese capital, expertise and infrastructure.

“Long-term financing and infrastructure ownership or management give China leverage in bilateral relationships, particularly when host governments become reliant on Chinese capital, technology or infrastructure operators,” he adds.

Each project has its own commercial rationale, but together they also expand China’s strategic presence along one of the world’s most important trade corridors

The model has served Beijing well. But as its commercial footprint expands across the Red Sea, so too does its stake in the region’s stability, raising the question of whether it can continue to expand its economic influence without becoming more deeply entangled in regional politics.

Can China stay neutral?

For years, Beijing has sought to answer that question by avoiding regional rivalries altogether. Rather than military alliances or political blocs, it has relied on trade, infrastructure and state-to-state economic engagement.

That neutrality has been deliberate, says Firmian, arguing China has “consistently avoided taking sides in regional rivalries to work simultaneously with competing governments”.

That pragmatic approach, he adds, protects Chinese investments, maximises economic opportunities and preserves Beijing’s image as a partner willing to engage with all actors.

But as commercial interests deepen, staying above the region’s political and security rivalries is becoming increasingly difficult.

“China has made attempts to contribute to conflict resolution in the Horn of Africa,” says Ovigwe Eguegu, a policy analyst at Development Reimagined. He points to Beijing’s appointment of Xue Bing as its first Special Envoy for Horn of Africa Affairs in 2022. Although China did not lead mediation efforts during Ethiopia’s Tigray war, the appointment signalled that stability in the Horn had become a strategic priority.

“The prioritisation is driven by Beijing’s sizeable investment in places like Ethiopia and Egypt, and broader economic opportunities,” Eguegu says. “As the world’s largest trading nation, growing insecurity in the Red Sea will require Beijing to increase coordination with countries such as Somalia, Djibouti and Eritrea to protect vital sea lanes.”

Sudan could become the clearest test. Eguegu expects Khartoum to turn to Beijing for investment, financing and technical expertise once reconstruction begins, with cooperation potentially extending beyond civilian infrastructure.

“Part of national reconstruction would include rebuilding its military. It won’t be surprising if Khartoum also prioritises China as a key military and security cooperation partner.”

Somalia points in the same direction. As tensions over Somaliland grow, Mogadishu is strengthening ties with Beijing to reinforce its diplomatic position.

“This has motivated Mogadishu to move closer towards China to counter the UAE-Israel-Somaliland triangular relationship.”

For Thaker, the shift is unsurprising. China’s goal, she says, is not to dominate the Red Sea or displace the US, but to become so economically indispensable that no major political or security realignment can ignore its interests.