The Digital Silk Road in Morocco

Image Source: Getty

China’s partnership with Morocco has grown significantly over the past two decades, especially after the accession of King Mohammed the Sixth in 1999. Historically a Western partner, Morocco is leveraging the growing multipolarity in the international community, specifically in the Mediterranean, to diversify its economic partners and address the country’s crucial infrastructure development challenges, technological advancement, and capital investment gaps. A key development in this regard was the signing of a Belt and Road Initiative (BRI) implementation plan between China and Morocco in 2022—the first Maghreb country to do so.

Since then, China’s BRI footprint has expanded considerably in Morocco, especially under the BRI’s Digital Silk Road (DSR), the technological and digital arm of the BRI. The DSR, also called the ‘Information Silk Road’, brings advanced Information Technology (IT) infrastructure to BRI investment recipient countries, such as broadband networks, e-commerce hubs and smart cities. It is driven by China’s tech giants, most notably Huawei and ZTE, who can deliver high-quality fibre optic cables at much lower costs than their European and United States (US)competitors.

A Western partner, Morocco is leveraging the growing multipolarity in the international community, specifically in the Mediterranean, to diversify its economic partners and address the country’s crucial infrastructure development challenges, technological advancement, and capital investment gaps.

Morocco is geostrategically important as a politically stable and developing economy at the intersection of the European Mediterranean, Sub-Saharan Africa, and the Atlantic Ocean.  Chinese aims in Morocco are to build investment and trade ties and bolster its market reach in the extended regions—the Med-Atlantic region and Sub-Saharan Africa. This article analyses the DSR in Morocco and delineates its geopolitical and geoeconomic implications. 

China’s growing geoeconomic influence in Morocco 

Since the turn of the century, China’s economic footprint in Morocco has considerably expanded. In 2023, Beijing emerged as the third largest exporter, at US$ 6.67 billion, to Morocco, behind Spain (US$ 12.1 billion) and France (US$ 6.7 billion). Chinese green energy and technology companies are also keen to invest in Morocco. Close to 200 companies have planned investments in Morocco. Beijing is heavily investing in its economic partnership with Morocco because it is a developing economy with a relatively stable political regime and liberal, forward-looking investment policies. Morocco also has free trade agreements (FTA) with the European Union, France, Italy, and the United States (US). Moreover, it is a signatory of the African Continental Free Trade Area (AfCFTA), under which any foreign company operating and manufacturing in Morocco is entitled to the same benefits of market access as a local Moroccan company. Since the imposition of increased tariffs, sanctions and duties by the US, Canada, and the EU on Chinese goods entering their markets, China has found it difficult to compete (at least in theory). This has expanded the significance of Moroccan shores for China’s geoeconomic and strategic play.

Beijing is heavily investing in its economic partnership with Morocco because it is a developing economy with a relatively stable political regime and liberal, forward-looking investment policies.

Table 1: Chinese DSR investments/infrastructure in Morocco

Source: China Global Investment Tracker, AidData

To that end, Chinese state and private companies, and state policy banks have built or invested in projects worth US$9.4 billion between 2013 and 2023. Major projects are concentrated in green energy development, green tech and energy manufacturing, and construction sectors.

Currently, China is a major hub for green tech and energy manufacturing. In 2023, the green tech and energy sector added 39 percent to the total investment in the country’s Gross Domestic Product (GDP). Notably, China also manufactures over 80 percent of the world’s solar panels and refines over 66 percent of the world’s critical minerals, essential for the green transition. Beijing is instrumentalising this heft, by building solar power plants and transmission systems to help Morocco achieve its green energy development targets and export overcapacity in its domestic green energy and construction sectors. China’s geoeconomic play in Morocco also involves the Tangier tech city. The Tangier city is a China-funded manufacturing hub in the Tanger Med port of Morocco, which houses Chinese state and private companies’ manufacturing units. The output from these factories will be targeted at the developed European and North American markets.

Major projects are concentrated in green energy development, green tech and energy manufacturing, and construction sectors.

Between 2021 and 2024, Chinese green energy and tech companies such as      BTR New Material Group, Gotion, CNGR, BYD, Qingdao Sentury Tire Company, and Youshan pledged to set up factories and manufacturing plants in Electric Vehicle (EV)-batteries, phosphate cathodes, tyres, critical minerals refining and EV assemblies. The total amount pledged by these companies amounts to US$ 8.9 billion. These factories and refineries are to be set up in the Mohammed VI Tangier Tech City, a Sino-Moroccan DSR project, financed by China’s Exim Bank at US$ 1 billion and developed by Beijing Zhonglu Urban Development Corporation, China Communications Construction and its subsidiaries, all Chinese state companies. Besides the geoeconomic considerations of circumventing EU and US tariffs on Chinese green tech and energy products, these investments are also targeted at ‘nearshoring’ Chinese manufacturing companies’ supply chains and production units to the developed markets of North America and the EU, as geopolitically motivated conflicts across the globe disrupt the East-West supply chains network globally.

Competing connectivity alternatives

China-funded development and Chinese economic incursions in the Maghreb are directly linked to the growing bilateral distance between Europe and the Maghreb. This is undermining relations with European countries, which for years, served as the only source of development aid and foreign investments to the region. France, especially, viewed the region as its sphere of influence and dictated its foreign and economic policies for a long time after the country’s independence from French colonial rule.

France, especially, viewed the region as its sphere of influence and dictated its foreign and economic policies for a long time after the country’s independence from French colonial rule.

However, China’s easy and swift disbursement of loans, aid, and investment, domestic and regional non-interference policy and growing economic heft furbished it with a head start. The EU’s Global Gateway—an EU initiative to invest in infrastructure projects worldwide—and Italy’s Mattei Plan are attempting to counter this heft through investments in the energy, infrastructure, transport, education and water sectors of Morocco’s economy.

Conclusion

Morocco's strategic location, coupled with its political stability and economic reforms, has made it an attractive destination for Chinese investment. Both the DSR and BRI have accelerated their economic and technological influence in Morocco. By investing in digital infrastructure and promoting technological advancements, China aims to strengthen its economic ties with Morocco and expand its market access in the broader region.

However, the geopolitical landscape in North Africa is complex, with competing interests from Western powers. Morocco's ability to navigate this geopolitical chessboard and leverage these competing initiatives will be crucial in shaping its future development trajectory. Ultimately, the success of the DSR in Morocco will depend on factors such as the quality of Chinese infrastructure projects, the sustainability of Chinese financing, and the country's ability to balance its economic and geopolitical interests.

Prithvi Gupta is a Junior Fellow at the Observer Research Foundation.

• International Affairs
• Africa
• China
• Belt and Road Initiative
• China-Morocco partnership
• Chinese investments
• Digital Silk Road
• geoeconomic influence
• green energy Morocco
• Tangier Tech City

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.

PREV NEXT