Assahafa.com
A recent report from the South China Morning Post has shed light on the increasingly important economic relationship between China and Morocco, particularly in the strategic electric vehicle manufacturing sector.
The article, published on November 29, details Chinese President Xi Jinping’s brief but significant visit with Moroccan Crown Prince Moulay Hassan on his return trip from the G20 summit in Brazil last week.
According to the South China Morning Post, President Xi stated that China’s engagement with Morocco has become “increasingly active,” with Chinese companies ramping up investments in Morocco’s electric vehicle battery and manufacturing industries.
The report highlights several major Chinese investments, including Gotion High-Tech’s $1.3 billion commitment to build Africa’s first EV battery “gigafactory” near the capital Rabat, as well as $300 million and $690 million investments from battery component makers
Experts quoted in the article, such as George Washington University professor David Shinn and Oxford Economics Africa economist François Conradie, point to Morocco’s strategic advantages that make it attractive to Chinese firms.
These include proximity to European markets, reserves of key battery materials like lithium and phosphate, green energy production capabilities, and the potential to leverage the African Continental Free Trade Area in the future.
The article also touches on how China is expanding economic and diplomatic ties with other North African nations like Tunisia and Libya, while still maintaining robust relationships with traditional partners Egypt and Algeria.
However, it notes the challenges China faces in balancing relations with rivals Morocco and Algeria, who are in disagreement over the disputed territory of Western Sahara.
US subsidies factor
The South China Morning Post report aligns with an earlier Associated Press article from July that provided context on how Chinese manufacturers are investing in Morocco and other countries with US free trade agreements to take advantage of provisions in the Inflation Reduction Act.
The $430 billion US law provides $7,500 tax credits for electric vehicles, but includes strict sourcing requirements aimed at reducing reliance on China.
According to the AP, at least eight Chinese battery makers have announced new investments in Morocco since the Inflation Reduction Act was signed.
Many are forming joint ventures that allow them to adjust ownership structures to comply with the US rules.
For example, CNGR, one of China’s largest cathode producers, is investing $2 billion in a project with Morocco’s royal investment group Al Mada.
Morocco’s automotive exports total nearly $14 billion annually. This thriving sector is supported by a robust manufacturing ecosystem that includes over 250 companies producing vehicles and components.
Most notably, Chinese-German battery maker Gotion High-Tech is investing $6.4 billion in Africa’s first EV battery plant in Morocco. Korea’s LG Chem has also partnered with China’s Huayou Cobalt in a Moroccan joint venture.
While the influx of Chinese investment has been a boon for Morocco, the country’s industry and trade minister Ryad Mezzour expressed concerns to the AP about rising protectionist policies making it more difficult to attract investment in the future.
US critics have also raised alarm about the potential for Chinese firms to access American subsidies via Moroccan investments.
These two reports make it clear that China sees Morocco as an increasingly essential partner in its electric vehicle supply chain strategy.
The North African nation’s unique geographic and economic advantages allow Chinese companies to solidify their global battery manufacturing leadership while navigating an increasingly complex international trade landscape.
Source: Morocco word news
