Morocco has brushed off the EU manufacturers fear that the billions of dollars of Chinese investment injected in the Kingdom could turn the country into a highly competitive industrial and export powerhouse.
Moroccan officials reject suggestions that their special economic zones will be used by China to export its excess production to the EU, deepening its deindustrialization crisis, said Financial Times in a story published over the weekend.
“We know that the EU is discussing industrial policy, but we think that Morocco can be one of the best partners in this. It will be a win-win situation,” said Yassine Elahyani, Head of emerging industries at the Moroccan Investment and Export Development Agency.
At a conference held lately in Casablanca, Mr. Elahyani said the “rules of origin” require products to be sufficiently transformed locally before entering the EU tariff-free. But some analysts remain dubious as Chinese investment in the country’s auto sector has reached about $6 billion since the pandemic, with major projects like Gotion High-tech’s $1.3 billion battery gigafactory and APG’s $70 million parts facility.
Morocco is marketing itself to overseas manufacturers with a five-year business tax holiday, a young workforce and trade access to 2.5 billion consumers through about 50 free trade agreements, including with the EU and United States, said FT.
Chinese groups are building a growing industrial base around Tangier and other Moroccan sites, centered on auto parts, battery materials and electric vehicle supply chains linked to Europe. The Mohammed VI Tanger Tech City near Tangier is hosting nearly a dozen Chinese businesses, including brakes maker APG, while Sentury Tire is already operating there and BTR New Material Group is constructing a plant.
In 2025, Morocco exported over €26 billion to the EU, its largest trading partner. The EU has imposed tariffs of up to 45 per cent on Chinese electric vehicles. The OECD says China subsidizes industry at between three and eight times the rate of its member countries, often using soft loans that are hard to detect and take action against.
But Chinese businesses hit back affirming that Morocco is a key node in European auto supply chains. Both Renault and Stellantis, the owner of Peugeot, have major factories in the country, complicating any trade defense measures.
Junjie Cai, project director at Chinese brakes manufacturer APG, which will open a $70 million facility in the Tanger Tech zone this year, said the plant would combine local labor and materials with Chinese supplies and technology.
“European, Moroccan and Chinese companies can all share the benefits of this collaboration. This also delivers supplies near to their factories in Europe that are priced competitively,” he said.
According to FT, China is in a position to build out an integrated supply chain in Morocco, from phosphate processing for batteries to factories and transport links to ports, increasing the strategic importance of the country for both Beijing and Brussels.
Furthermore, EU officials said it could be difficult to distinguish genuine Chinese industrial collaboration with Morocco from attempts to circumvent EU import tariffs.
