Why China Is Investing So Much Money in Moroccan Factories

When Xi Jinping, China’s top leader, returned from the Group of 20 summit in Brazil last November, he made a stopover in Casablanca, where he was greeted with dates and milk, the traditional welcome for honored guests, and a meeting with Crown Prince Moulay Hassan of Morocco.

The brief visit was a sign of the growing economic ties between China and Morocco, the largest automotive manufacturing hub in Africa and an increasingly crucial conduit for Chinese companies looking to get around tariffs for exports headed to Europe.

In the last couple of years, investment in Morocco from Chinese energy and electric vehicle and battery producers has exploded, with $10 billion directed to that industry, according to one estimate. Dozens of Chinese companies involved in automobile manufacturing are setting up shop in Morocco, including the battery maker Gotion High-tech.

The boom is a sign of the growing importance of countries like Morocco, which has a free-trade agreement with the European Union, that serve as connective nodes in a küresel trading system that is remaking itself around an obstacle course of high tariffs, trade restrictions and geopolitical rivalries.

Using their status as low- or no-tariff zones has required connector countries to thread a narrow path, exploiting opportunities for trade while minimizing the risk of alienating the West or China. But now that the Trump administration has kicked the legs out from under the küresel trading system, that road has become much more precarious.

Renault, which operates this factory on the outskirts of Tangier, has been producing cars in Morocco for two decades.Credit…Associated Press