Morocco, new refuge for Chinese investments in the face of US sanctions

China is stepping up its investments in Morocco to circumvent the United States, which has adopted new subsidies aimed at boosting domestic production of electric vehicles and reducing Beijing’s dominance over the supply chain.

Chinese manufacturers are flocking to Morocco, with eight of them announcing plans to set up new factories to make parts for electric vehicles near Tangier and in industrial parks near the Atlantic Ocean that could qualify for $7,500 credits for U.S. car buyers, reports Associated Press. They plan to expand their investments to other countries that share free trade agreements with the United States, including South Korea and Mexico. This Chinese strategy has been in place since President Joe Biden signed into law the $430 billion Inflation Reduction Act, a US law designed to combat climate change. “By shifting their operations to US trading partners like Morocco, Chinese players that have long dominated the battery supply chain are looking for a way to capitalize on growing demand from US automakers like Tesla and General Motors,” said Kevin Shang, senior battery analyst at consultancy Wood Mackenzie.