The Chinese economic presence in Morocco has witnessed an increasing expansion in recent years, at a time when Rabat seeks to strengthen its position on the map of international trade and investment and attract foreign capital to strategic sectors. However, this economic rapprochement with Beijing raises questions about its repercussions on Morocco’s relationship with its European economic ally, as well as with the United States, especially in light of the intensification of trade competition between Washington and Beijing.
The new center of gravity for Chinese industrial investment
From the Chinese point of view, the importance of Rabat is not limited to being a center for investment and trade, but it also represents a strategic gateway to Europe and Africa. Beijing realizes that its success depends not only on building ports and infrastructure, but also on creating industrial bases that can seamlessly integrate into the global economy. This is why Chinese investments in Morocco focus on sectors with high added value, as the value of the announced Chinese projects in the battery system and electric vehicle components exceeded $10 billion, with a main focus around Tangier Tech City and the giant Gotion battery factory project in Kenitra. These sectors not only contribute to job creation, but can also support technology transfer and integrate Morocco into the industries of the future.
Five factors give Morocco the advantage
First, political and institutional stability. Secondly, the continuation of economic reforms. Third, the advanced infrastructure, especially the port of Tangier Med, which has become a very important international logistics center. Fourth, the network of free trade agreements that give Moroccan products access to markets with hundreds of millions of consumers. Fifthly, it provides a qualified and competitive workforce compared to a number of competing economies. Together, these elements have helped Morocco move from an economy largely dependent on traditional industries to a growing regional center for advanced industries.
A remarkable rise for China
Although China is a relatively new investor in Morocco compared to traditional investment powers, its rise has been remarkably rapid. In less than ten years, Chinese investment flows rose from about 406 million dirhams in 2015 to more than 2.08 billion dirhams in 2024, almost reaching the level of Germany, whose investment amounted to about 2.47 billion dirhams, even though the latter has had a well-established industrial and investment presence in Morocco for decades. This development highlights the exceptional speed with which China is expanding in the Moroccan market: while France, Germany, and the United States built their investment positions over many years, China was able, in a relatively short period, to reduce the difference and reach a level close to some of these traditional investors, making it one of the fastest rising investment powers in Morocco.
Najah faces great challenges
For his part, European Union Trade Commissioner Maroš Šefčović expressed his concern about trans-shipment or re-export operations through Morocco, indicating that Brussels will check the extent of real compliance with the rules of origin before goods enter the European single market. The Association Agreement between the European Union and Morocco grants goods of Moroccan origin customs exemptions or reductions when entering the European market, an advantage that Chinese companies seek to benefit from by transferring stages of manufacturing operations to Moroccan territory. For years, Morocco has worked to consolidate its position as a link between Europe and Africa. But it is now turning into something else as well: a platform to receive Chinese industrial capital that seeks to remain close to European customers, without being directly exposed to the tariff barriers that the European Union has erected against Beijing. This shift will accelerate significantly in 2026, driven by declining trade interdependence between the United States and China, higher European tariffs on Chinese electric cars and batteries, along with pressure from Beijing itself on companies to diversify export routes and markets.
Complex equation
For Morocco, the equation seems more complicated. On the one hand, Chinese investments represent an economic opportunity that Rabat does not want to lose, and on the other hand, the Kingdom has important strategic and economic relations with the United States as well as the European Union. Here the question arises about Morocco's ability to maintain the balance between the two parties, and whether the continued expansion of Chinese investments may push Washington and Brussels in the future to put pressure on Rabat, or demand greater guarantees regarding the origin of the products that reach their markets.
American concern
In a phenomenon that American policy circles describe as “Mexicanization” or “Mexicanization,” meaning the possibility of Morocco becoming a platform for re-exporting Chinese components, Washington is raising concerns about the ways some Chinese products reach the American market, especially in light of the customs duties and restrictions imposed by the United States on imports coming from China.
Moroccan expert Jihad Ait Soussan says in this regard: “I think that the American warnings must be taken seriously, but without exaggerating them. The American message is basically: We do not object to Chinese investment, but we want to make sure that the Chinese product that enters the American market through Morocco actually meets the rules of origin.”
One issue is the possibility of using third countries and their ports or industrial facilities to redirect or conduct manufacturing and assembly of Chinese products before exporting them to other markets. Hence, questions arise about Morocco’s position in this equation, especially with the development of its port and industrial infrastructure and the increasing interest of Chinese companies in investing in it. These fears do not necessarily mean that Chinese investments themselves are being targeted, but they reveal Washington's increasing sensitivity towards the expansion of China's economic presence globally, and its attempt to prevent circumvention of the restrictions and fees it imposes on Beijing. For his part, expert Soussan believes that the American position is justified, and that the rise in Chinese investments would “create tension, but not necessarily confrontation. The source of American concern is not Chinese investment per se, but rather the possibility that Morocco will become a platform for redirecting Chinese products to the American market to avoid customs duties. This fear will become more clear in 2026, with Washington tightening control over what is called “commercial transit.”
China's entry into Europe through Morocco
The Financial Times reported that officials concerned with German trade policy in Brussels internally raised the issue of Morocco, amid fears that circumventing trade measures would distort competition for European industrial companies, which are already facing increasing pressure from Chinese competitors in global markets through the “transshipment” process, as Shevcovich described it, in statements to the newspaper.
Analyzes issued by the European Council on Foreign Relations and the Stimson Center also placed developments in Morocco within a broader context, which is the tendency of Chinese companies to establish manufacturing bases outside China, especially in the Middle East and North Africa region, with the aim of hedging customs duties and trade restrictions in major export markets.
But Morocco is distinguished from many of these countries because of the depth of its trade relations with the European Union, its geographical proximity to Europe, and its possession of an already existing industrial and logistical infrastructure, which makes it one of the most advanced examples of this strategy in the European neighbourhood. In this regard, expert Soussan adds: “We must first distinguish between Chinese investment in Morocco and political alignment with China. Morocco does not view China as an alternative to the United States or the European Union, but rather as an additional economic partner that can help it accelerate industrialization and diversify its partnerships.”
Regional economic player
The Morocco issue may be just a prelude to a trade dispute that will become more complex in the coming years. In the midst of this conflict, Morocco's real success does not lie in attracting Chinese or European capital per se, but rather in using competition between major economic powers to serve its national development project. If Rabat is able to maintain this balance, it will not simply become an arena for competition between China and Europe, but rather it can transform into a regional economic player capable of imposing its position within the equations of international trade and industry.
Morocco's strong budget cards
The real challenge facing Morocco is not choosing between China, America, and Europe. The challenge is how to turn the competition between these powers into an opportunity for Morocco. The expert Ait Soussan adds: “First, Morocco has a deep strategic partnership with the United States, including a free trade agreement. Second, it has a very important economic and trade partnership with the European Union. Third, Morocco can present itself to China as an industrial platform towards Africa and Europe, and not as a platform to circumvent US sanctions or tariffs. Therefore, Morocco’s main card is diversification without bias: to deal with China economically, and at the same time maintain its strategic partnerships with Washington and Brussels.”
While the Kingdom maintained strong strategic relations with Europe and the United States, it also opened its doors to investments coming from China, Japan, and the Arab Gulf states. This policy has contributed to creating a more competitive environment for investors, while at the same time reducing dependence on one economic partner.
He added: “It is necessary to benefit from the Moroccan equation that combines geographical location, stability, infrastructure, ports, industrial system, renewable energies, and the ability to access European and African markets, as it is a trump card that gives him advantage in the region.” The expert believes that receiving Chinese investments of this size would provide financing, technology, industrial expertise, and job opportunities, and help Morocco move from exporting raw materials to producing components with a higher added value, which undoubtedly serves the economic agendas and interests of the Kingdom. Here the method is clear: “Enhancing transparency, respecting the rules of origin, and proving that there is added value and real production within Morocco, and not just re-export.”
If Morocco is able to create this balance, it will not become an arena for conflict between the major powers, but rather it will become an economic bridge between them, and this is exactly the position from which Morocco can benefit.
Writer: Weam Al-Maatawi
