The new problems of buying online imported goods from China to Morocco, will they be good for the local market?

The Kingdom of Morocco is the second African country to have established diplomatic relations with China. During these 64 years of relations, China and Morocco have carried out cooperation on several levels, especially economics and trade. The year 2016, was the year that opened a new stage for bilateral cooperation between the two countries and boosted buying online habits related to imports from China to Morocco. Relations between the Kingdom and the Republic were strongly consolidated thanks to the strategic partnership initiated the same year. This initiative has given new impetus to Chinese-Moroccan cooperation. However, today, this cooperation faces a major challenge, in the form of taxation problems concerning buying online goods imported from China to Morocco. What are the reasons for this new measure? What does this imply for local producers? That's what we'll see together!

The importance of Chinese-Moroccan cooperation.

During the past 20 years, the People's Republic of China has been able to position itself as a world economic power. On the other hand, Morocco has been able to achieve undeniable social and economic progress. Thanks to its geostrategic position, Morocco is at the crossroads of all cultures. The Kingdom of Morocco is the gateway to Africa, Europe, the Atlantic and the Mediterranean. Aware of this advantage, the People's Republic of China maintains multidimensional ties with the Kingdom. This allows China to consolidate its Belt and Road Plan. Moreover, according to Chinese customs statistics, the total volume of trade between the two countries reached 4.76 billion US dollars in 2020. Currently, China is Morocco's third largest trading partner. Furthermore, Chinese companies are investing heavily in several areas such as manufacturing of automobile equipment, fishing, agriculture, power plants and textile. This last sector has recently been subject to taxation which has not gone unnoticed.

The impact of the taxation on buying online imported products from China in Morocco on the local market?. 

Since the beginning of the COVID-19 pandemic, products imported from China to Morocco have experienced a flagrant growth. The textile sector in the Kingdom is no exception to the rule. The latter has seen strong competition from international e-commerce platforms. According to statistics, the Shein website (a Chinese e-commerce site) recorded more than 80,000 transactions per month on Moroccan soil during the pandemic. This success of buying online imported goods made by Shein is explained by the low prices applied by the Chinese e-commerce website, which do not allow local textile producers to compete with this Chinese platform. This success is also explained by the unfair competition practiced by several Moroccan importers who exploited the legal hole concerning the exemption from customs taxes on e-commerce purchases (less than 1200 DHS). In other words, an importer respecting the law must pay customs fees which can amount to 68%, while other importers who act illegally import their goods from China to Morocco without paying anything.

This competition has led to the collapse of several small and medium enterprises in the Moroccan textile sector. To fight against this unfair competition as well as the disguised mass import of products from China to Morocco, the government of the Cherifian Kingdom has decided to modify the existing decree, which came into force in 1977. Moroccan leaders have decided to put an end to the exemption from customs duties on buying online imported goods from China below 1200 DHS. Thus, the hundreds of thousands of Moroccans who follow Chinese e-commerce websites will have to pay customs fees, regardless of the value of their purchases. This new taxation will allow the Moroccan State to boost its tax revenue and protect local producers and importers against unfair competition