Chinese Investments in Morocco Raise EU Concerns Over Backdoor Entry for EVs

Chinese investments in the automotive components sector in Morocco have become a growing concern for the European Union, amid fears that the kingdom could turn into a manufacturing and export platform for Chinese products into Europe, potentially circumventing EU trade restrictions and increasing pressure on local industries.

A New Industrial City Attracting Chinese Firms

All eyes are on the Mohammed VI Tangier Tech industrial city, currently being developed on a 500-hectare site near Tangier, which is attracting a growing number of Chinese companies operating in the production of electric vehicle components—from braking systems to batteries. This expansion is considered one of China's largest industrial moves outside Asia. Brussels fears these multi-billion-dollar investments could serve as a backdoor for subsidized Chinese products to enter the European market through Morocco, bypassing tariffs and restrictions that the EU has imposed on direct imports from China.

European Warnings Over Chinese Overcapacity

EU Trade Commissioner Maroš Šefčovič stated that Chinese investments in Morocco reveal Beijing's attempts to address its industrial overcapacity by redirecting exports to Europe through trade partners, stressing that this issue has become a major challenge for the European economy. This matter is particularly significant as Morocco has emerged as one of the region's leading automotive manufacturing hubs, hosting major factories for Renault and Stellantis, which gives the kingdom a pivotal role within European supply chains and makes any protective measures more complicated.

For their part, Chinese companies view Morocco as an ideal manufacturing location due to its geographic position and extensive trade agreements with Europe. Cai Junjie, project manager for the Chinese company APG, stated that its new factory in Tangier, with investments worth $70 million, will rely on local Moroccan labor and materials combined with Chinese technology, helping reduce production and transportation costs while enhancing competitiveness within European markets.

Over $6 Billion in Investments Since the Pandemic

Data from the Rhodium Group indicates that announced Chinese investments in Morocco since the COVID-19 pandemic have exceeded $6 billion, including a $1.3 billion battery factory project by Gotion High-Tech in Kenitra, along with other investments in tires, batteries, and electric vehicle components. This massive industrial expansion reflects China's ambition to strengthen its presence in global markets through Morocco, as European governments are reassessing their trade and industrial policies to reduce reliance on Chinese imports and protect their domestic industries.