Bloomberg’s trade and investment data identified Morocco as one of five countries, alongside Vietnam, Poland, Mexico, and Indonesia, that have not aligned with either side of the new geopolitical conflict between Washington and Beijing.
Morocco has become a crucial player in the geopolitical landscape as an emerging economy serving as a key connection point in a divided global economy, according to Bloomberg.
As a collective, these 5 countries recorded an economic output of $4 trillion in 2022, surpassing that of India and rivaling the economies of Germany or Japan.
Despite their vastly different policies and histories, they share a desire to seize anticipated economic gains by working on becoming new connecting points between Washington and Beijing or between China and Europe and other Asian economies.
Morocco, with its geographical location and trade facilitation capabilities, has become a significant neutral ground. Its impact is represented by 4% of the global GDP, having attracted just over 10% of the total foreign direct investment in new facilities since 2017.
These countries have also experienced an accelerated growth in their trade with the world, defying the prevailing trend over the past five years, according to the same data.
Economists from the International Settlements Bank examined data from over 25,000 companies, discovering the extension of supply chains.
Companies shifting supply chains away from China mostly relocate production to countries with more integrated economies with the Chinese economy, such as Morocco.
Morocco is home to the world’s largest phosphate reserves and is becoming a significant player in the global automotive sector. The mineral is a crucial component in iron and lithium phosphate batteries, a rapidly growing type of rechargeable battery used in electric vehicles.
The country has a growing automotive sector, with Renault SA and Stellantis factories producing thousands of cars daily, supported by dozens of well-known American suppliers such as Lear, and Commercial Vehicle Group,both of which have announced plans to expand this year.
Morocco’s strong trade relationships with Europe and the United States, coupled with its welcoming stance toward foreign direct investment, make it a place where companies, regardless of their alignment in the U.S.-China conflict, can compete or collaborate.
In 2022, Morocco announced $15.3 billion in foreign-funded new factory projects, nearly equal to the total of the previous five years combined. The overall trend shows no signs of reversal.
In May, the Chinese company Gotion High-Tech signed a deal with Morocco to establish a $6.4 billion battery factory, one of the world’s largest.
In September, China’s Singo Advanced Materials, a battery component manufacturer, announced a $2 billion project to produce iron and lithium phosphate batteries, eventually sufficient to power one million vehicles annually.
The CEO of Singo Europe, Torsten Lahr, stated that Morocco is in a strategic location for delivering car batteries in the future.
In September, South Korea’s LM Chem and China’s Youyshan, a subsidiary of Hyayou Group, announced their intention to turn Morocco into their global base for the iron and lithium phosphate battery market, with plans to start large-scale production in 2026.