What comes to mind when it comes to Morocco? It may be the exotic Sahara Desert depicted by author Sanmao, or it may be a series of blockbusters such as "Casablanca", "Mission Impossible 5", "Game of Thrones", etc.
From October 9th to 15th local time, the World Bank and International Monetary Fund (IMF) annual meeting was held in the millennium old city of Marrakech, Morocco. Two years ago, due to the outbreak of the COVID-19, the annual meeting originally scheduled for 2021 was postponed until now. In September, when the annual meeting was about to begin, the region where Marrakech is located was hit by a strong earthquake, resulting in nearly 3000 deaths. After evaluation and communication with two major international organizations, the Moroccan government has decided to hold the annual conference as scheduled.
For Chinese enterprises that actively participate in the "the Belt and Road" initiative and come to Morocco to invest, this country located in a corner of northwest Africa is more like the Pearl of North Africa on the Silk Road Economic Belt, an investment hotspot where opportunities and challenges coexist.
The scorching heat has receded, and under the sunshine of the Mediterranean, everything in Morocco is rapidly recovering. Tourists are gradually returning, and the economy is showing vitality.
We're late
In mid October, Tangier, Morocco, saw winding waves and sea breezes, with mountains clearly visible on the southern coast of Spain. Tangier is located at the northernmost point of Morocco and is a famous port city in the Mediterranean region, making it a crossroads for world transportation. It guards the Strait of Gibraltar, looks north to the European continent, and is only about 14 kilometers away from the southernmost point of Spain.
More than 700 years ago, renowned scholar and traveler Ibn Battuta embarked on a journey to the east that lasted over 20 years and had a physical distance of nearly 120000 kilometers, reaching as far as present-day Quanzhou, Hangzhou, and other places in China.
Nowadays, many Chinese companies have traveled thousands of miles to come here.
Qin Long, Chairman of Qingdao Senqilin Tire Co., Ltd., told a reporter from First Financial that what impressed him the most were three "exceeding expectations": firstly, the administrative efficiency of the local investment attraction department in Morocco was higher than expected, secondly, the labor skills and professional qualities of local industrial workers were higher than expected, and thirdly, the urgency of local people to improve their living standards was higher than expected.
We're late, "Qin Long sighed." If we had known about this earlier, the second phase of the Thai factory might have moved directly here. "According to Qin Long, Sen Qilin will invest nearly $300 million in Tangier Technology City, with a goal of producing 12 million tires annually.
Why come all the way to Morocco to invest?
Qin Long's answer can be roughly summarized in 16 words: policy incentives, geographical advantages, trade dividends, and social stability. These 16 words are also the unanimous opinions given by several Chinese companies interviewed and surveyed by First Financial reporters who visited the three major cities of Morocco from south to north within five days.
Taking tax policy incentives as an example, the Tangier Technology City where Sen Qilin has settled has offered many preferential conditions for enterprises to settle in, including exemption from corporate income tax for the first 5 years and subsequent collection at a rate of 20%; Exemption from import tariffs and import value-added tax; Exemption from production and consumption taxes, export taxes; Exemption from business tax for 15 years, etc.
The introduction of the above preferential policies is a manifestation of Morocco's pursuit of a new development model at the national level. King Mohammed VI of Morocco previously personally presided over the release of the "New Development Model Report of Morocco", setting Morocco's 2035 development goals. The report emphasizes that the construction of the Tangier Science and Technology City project should be regarded as a strategic measure to deepen Morocco China relations.
The Tangier Technology City, located in the southern part of Tangier, has a planned area of approximately 2200 hectares and is divided into two parts: industrial park and modern urban construction. Currently, it is jointly operated by China Road and Bridge Engineering Co., Ltd. on behalf of China and Morocco.
Unmatched location advantage
In Tangier, the Mediterranean Port was developed earlier than the Technology City project. Due to the convenience of convenient location, according to the performance ranking of container ports, Tangier Mediterranean Port has become the first major port in Africa and the fourth largest in the world.
In an exclusive interview with First Financial, Mehdi Tazi Rifi, CEO of Tangier Mediterranean Port, provided a set of data: as a global logistics hub, Tangier Mediterranean Port has logistics exchanges with about 40 African ports every week and about 180 ports worldwide.
In this interview and research, multiple Chinese companies also told First Financial that when they come to Morocco to establish their business layout, the first thing they value is Morocco's gateway position on the African continent and its location advantage in radiating into the European market.
Luo Yu, the head of Romantic Leather (Morocco), told First Financial that despite challenges in language, culture, social customs, and other aspects, after multiple inspections, the company's management still decided to open the new factory in Morocco. Previously, the company had opened factories in places such as Sihanouk Port in Cambodia.
Coming to Morocco, a completely unfamiliar environment, the positive response of customers is the key to their determination. One of our major clients is in Porto, Portugal. They were very happy to hear that we are coming to Morocco (to set up a factory). Because shipping from here to Porto only takes three days by sea, and now we are in the same time zone as the client, communication efficiency has greatly improved, "said Luo Yu.
In addition to geographical advantages, Yan Bin, General Manager of China Road and Bridge Engineering Co., Ltd. (Morocco), pointed out in an interview with First Financial that another major advantage of investing in Morocco is that Morocco is one of the few economies in the world that has signed free trade agreements with the European Union and the United States, which means that the vast majority of Moroccan products can enter the European and American markets with zero tariffs.
In addition, Morocco signed the African Free Trade Area Agreement (AfCFTA) in 2018, allowing Moroccan products to freely enter 44 major African economies.
Nasser Bouchiba, Chairman of the Moroccan African China Cooperation and Development Association, always tells Chinese investment groups visiting Morocco that investing in Morocco means entering the entire northwest Africa, a vast market with a huge population.
During an interview with First Financial, Nasser wore a Zhongshan suit and spoke fluent Chinese, saying, "You know, there is fierce competition among enterprises in China. If you come here and make some localized improvements while establishing a coordination mechanism, it will be easier to achieve success
The sense of presence of Chinese enterprises is becoming stronger and stronger
Yang Jun, the Moroccan national manager of XCMG Import and Export Company, told First Finance that on the one hand, they have proven through their products and services that "Chinese products are reliable, and Chinese people are also reliable in doing things"; On the other hand, it also invests in the relatively backward infrastructure in the local area, which is welcomed by the people.
Abdul Hamid Habibi, CEO of his partner HCEM Morocco, also expressed recognition for the role played by Chinese companies in Morocco's economic development. He told First Financial that Chinese companies in Morocco are very aware of their specific market and will make flexible adjustments based on this market. "The development potential of Chinese companies here will be very huge," he said; More and more Chinese companies have demonstrated their strength in the Moroccan market, and Moroccans are beginning to have confidence in China's products, services, and quality
Nasser, who has long been interested in Sino Moroccan economic and trade cooperation, also told reporters that more and more Chinese companies have recently come to Morocco to inspect commercial projects, with a typical industry being the mining industry.
Morocco is rich in mineral resources, rich in phosphate, lead, zinc, etc. Among them, relying on its rich phosphate ore reserves, Morocco has become one of the major phosphate producing countries in the world. Phosphate is an important component of fertilizers. The Moroccan government has announced multiple measures to attract foreign investment, with the aim of promoting the development of the country's mining industry.
Hu Yang, General Manager of Nador Mining in Morocco, told First Finance that Chinese companies have enormous development potential in the Moroccan mineral industry. Firstly, due to the limited entry of Chinese companies at the current stage, and secondly, Morocco's national level highly encourages the development of mining and has introduced a series of preferential policies, such as:, The export of mineral products is zero tariff, and the new company can be exempt from occupational tax (a type of personal income tax) for five years. If it is an export-oriented mining enterprise, there is also a discount on company tax
Despite the emergence of investment opportunities related to Morocco under the initiative of jointly building the "the Belt and Road", representatives of several Chinese enterprises also reminded that the Moroccan market has its own characteristics, and investment and operation in Morocco also face challenges, especially the need to pay attention to differences in language, culture, social customs and other aspects.
The representative of the Moroccan trade department told First Finance that on the one hand, Morocco looks forward to showcasing the achievements of the continuous development of Moroccan society to the international community through the annual conference, and conveying the signal that the Moroccan economy insists on opening up to the outside world; On the one hand, it stressed the importance of the "the Belt and Road" initiative for Morocco's economic development, welcomed Chinese enterprises to invest in Morocco, and looked forward to the prospect of China Morocco economic and trade cooperation.
Currently, there are no anti government forces in Morocco, and the overall social security situation is good, making it one of the safest countries in the African region.
Relying on its favorable geographical advantage, Morocco's economy has maintained stable growth in recent years, with an average annual growth rate of gross domestic product (GDP) of around 4% and an inflation rate generally maintained below 2%. According to World Bank data, Morocco's per capita GDP in 2021 was approximately $3500, making it a middle-income developing country, the fifth largest economy in Africa and the third largest economy in North Africa, and one of the countries with the lowest debt burden on the African continent.
At the Bab Ighli venue where the annual conference was held, First Financial reporters also noticed the presence of many Chinese brands.
Whether communicating with the Moroccan people or Moroccan business community during this trip, one can feel the open mindset and natural friendship of the local people towards China. Sun Jingyang, the manager of Momo China Friendship Travel Agency, said that their travel agency had a Moroccan employee who, during a job interview, stated that their job motive was to work with Chinese people, learn and understand Chinese culture, and even not care about salary levels, as their future plan was to develop in China. In the end, he also achieved his wish and found a job in China, and stayed behind.
We believe in China's economic strength, "said Imani, a Moroccan university student who volunteered at the Marrakech World Bank/IMF Annual Conference. She believes that the Moroccan people hope to establish more cooperative relationships with China.