Spain and Morocco Compete to Be China’s Gateway to Europe
Pedro Canales
China’s short-term goal is to fully enter the European market, and in the medium term, the U.S. market. To achieve this, it aims to establish a foothold, which for Europe could be in Morocco or Spain. The decision has yet to be made.
Morocco has free trade agreements with Europe and the United States, allowing Beijing to place its most marketable products, such as electric cars, in the Western market. Spain, on the other hand, as a member of the European Union and having a Treaty of Friendship, Navigation, and Commerce with the U.S., can facilitate the transit of mass-consumed products exported by China.
The imposition of European tariffs on the import of Chinese electric cars, which could reach up to 38%, has been poorly received by Xi Jinping’s China. Spanish President Pedro Sánchez, currently visiting Beijing, has asked the European Union to reconsider these tariffs, arguing that “what we need is not a trade war, but to build bridges between the European Union and China.” Spain is also studying the possibility of installing a Chinese MG car factory on its soil.
Pedro Sánchez’s extended hand to Xi Jinping has other goals: in the short term, to prevent Beijing from applying commercial retaliations on the import of pork products, in which Spain ranks first in exports to China, ahead of the U.S. and Brazil, with a balance of 1.4 billion euros in 2023; and in the medium term, to establish itself as a bridgehead for exports of electronics, security devices, and electric vehicles to Europe.
However, our southern neighbor, Morocco, is also pursuing the same objective of being an intermediary for China’s electric car and consumer electronics market to Europe and, why not, also to the U.S. So far, Rabat has managed to secure the Chinese industrial giant Gotion High-Tech to build a gigafactory for electric car batteries near Kenitra, with an investment of 1.2 billion euros.
It is true that this Chinese decision comes at a time when Morocco’s automotive industry has reached an annual production of 700,000 cars by the Stellantis and Renault groups, which are looking to shift from thermal engines to electric ones to meet European demand. However, it is not excluded that China aims to go further and establish this battery megafactory for its own vehicles, which could be produced in Spain or Morocco.
China’s entry into Europe is a medium-term challenge. The Chinese giant, the world’s largest manufacturer and exporter, carefully studies each of its steps, and according to analysts and observers, it is in a position to make very attractive offers to its partners, whether Moroccan or Spanish. The haste of Spanish President Pedro Sánchez’s trip to China, therefore, seems evident.
