Why China Is Investing So Much Money in Moroccan Factories

When Xi Jinping, the main leader of China, returned from the group of 20 Cumbres in Brazil last November, made a scale in Casablanca, where he was received with dates and milk, the traditional welcome for the guests of honor and a meeting with the heir prince of Hassan de Hassan.

The visit to the letter was a sign of the growing economic ties between China and Morocco, the largest automotive manufacturing center in Africa and an increasingly crucial duct for Chinese companies looking for tariffs directed to Europe.

In recent years, investment in Morocco of producers of electric vehicles and electric vehicles and batteries has exploded, with $ 10 billion aimed at that industry, according to an estimate. The boxes of Chinese companies involved in the manufacture of cars are being installed in Morocco, including the Battery High-Tech battery manufacturer.

The boom is a sign of the growing importance of countries such as Morocco, which has a free trade agreement with the European Union, which are connected nodes in a global commercial system that is referred to in a river obstacle race, commerce.

The use of its status as low or non -tariff areas has required the connector countries to be a narrow path, exploiting opportunities for trade while minimizing the risk of alienating the West or China. But now that the Trump administration has expelled the legs from under the world commercial system, that path has become much more precarious.

Chinese car manufacturers, which have increased in front of many rivals in battery technology, automated driving and entertainment software, have great ambitions to expand throughout the world in Latin America, Asia, Europe and Africa.

Even before the elections of President Trump, the United States and Europe were more concerned about how their own electric vehicles would come with Chinese companies that sell at discount prices. Last year, the Biden administration blocked Chinese EVs by putting a 100 percent tariff on the subject, and the European Union increased its tariffs on Chinese electric vehicles to up to 45 percent.

These types of commercial sand traps have been a blessing for countries such as Mexico, Vietnam, Thailand, Malaysia, India, Indonesia, Turkey and Morocco, which allows companies to avoid import tariffs. In the case of China manufacturers, Morocco is a main connector country for the European Union.

Beijing “wants to take advantage of the key advantages of Morocco,” said Alexandre Kateb, economist and founder of the multipolarity report, a strategic advice platform.

At the door of Europe and Africa, Morocco has been building a “automotive industry ecosystem” for 20 years, Kateb said. The country has a sophisticated transport network that includes ports such as Tangier-Med and large phosphate reserves, which are used in the production of car batteries. The country has also quickly moved to the transition to clean energy.

Morocco became the main car exporter of the European Union in 2023, Size -Up China, Japan and India, according to Auto World Journal.

The French car manufacturer Renault, drawn by lower labor and energy costs than in Europe, has been manufacturing in the country for more than 20 years. The Stellantis automatic group, owner of Chrysler and Jeep, has been expanding its footprint in Morocco since 2019.

“For Chinese car manufacturers, Morocco could now play that same role for Europe” that Mexico made for manufacturers who sought to dodge American tariffs, said Ahmed Abueudouh, a member associated in the program of Casa Middle de Chatham in Chatmam.

But the needle tensions between China and the United States, as well as China and Europe, created an act of difficult balance for Morocco, where economic and geopolitical conerns do not always align. Washington has raised tariffs on China to the high axis of 145 percent.

The Trump administration could decide to press possible Morocco threatening with higher tariffs to adopt a position for the United States.

Morocco “sees China as an important partner,” said Abueudouh, but is “aware of the risk” that Trump can suppress the countries that trade with China.

Chinese loans and investments through their Belt and Road initiative have helped enhance the economic development of Morocco, helping to build the kingdom’s infrastructure with projects such as a high -speed rail line, solar energy plants and $ 10 billion in Tangier. This year, a Chinese company was chosen to provide steel for a planned gas pipe of $ 26 billion between Nigeria and Morocco.

At the same time, the US strategic association is also a priority for Morocco, said Abueudouh. Morocco is involved in military exercises with the organization of the North Atlantic Treaty and collaborates with the United States on terrorism. Morocco would also like to obtain American combat aircraft F-35. Morocco won the Chinese welcome “at the expense of the EU and the United States,” he said.

For Morocco, a priority is the Western Sahara, where a movement of independence for control during the last 50 years is fighting. Trump recognized Moroccan sovereignty over the region in 2020 in exchange for the normalizing relations of Morocco with Israel, and the government would not want to do anything to endanger that.

Morocco has had a free trade agreement with the United States for two decades. However, Trump has submitted it to a rate of 10 percent general that is imposed on all virtual imports. But Morocco has not threatened with the levels of additional punishment rate aimed at nations such as Mexico, Vietnam and Thailand.

Meanwhile, Chinese production continues to increase, something that could the attention of the Trump administration. In January, a Chinese manufacturer of battery pieces began pumping components in a new joint company in Jorf Lasfar, near the Deepwater commercial port of Morocco, part of a $ 2 billion agreement signed in 2023.

In October, the Chinese manufacturer of Tires Seated supplied production in a new factory in Tangier Tech City, a planned area for any of the 200 Chinese companies.

And last summer, Gotion, the Chinese battery manufacturer, announced plans to build a “gigafactory” of $ 1.3 billion, the first in Africa. This investment could increase to $ 6.5 billion, according to the Moroccan government.

“Morocco has been following a coverage strategy for a long time” between the United States and China, said Mr. Abueuh in Chatham House. “The Biden administration showed them some tolerance” when it comes to Chinese investments. But if this maneuvering space is adjusted under the Trump administration, “I think they will show more caution.”