Spain Set to Approve Chinese Car Factory Next to Key NATO Naval Base, Despite Spy Warnings

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A Chinese State Company Gets the Green Light

Spain's Defence Ministry has confirmed it will approve plans by SAIC, a Chinese state-owned carmaker, to build a large factory in the Galicia region in northwestern Spain. A ministry spokesperson said the approval will go ahead despite reports of potential security risks tied to the plant's location near a naval base.

SAIC owns the MG brand, which is popular across Europe. The new factory will be able to build up to 120,000 cars a year for MG, with construction due to start in 2027 and full operations planned from 2028. It would be SAIC's first car plant anywhere in the European Union.

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Why the Location Worries Spain's Own Military

The site chosen for the plant sits only a few kilometres from Ferrol, a city that hosts one of Spain's most important naval bases. Spanish newspapers El Mundo and El País reported that Spain's intelligence services had warned in internal reports about the risk of espionage from a plant built just 5 kilometres (3.1 miles) from Ferrol, a key port for the navy and a maintenance site for F-100 frigates that take part in NATO missions.

The concern is not simply that a car factory is being built. It is who stands behind it. Spanish military sources cited by the newspapers said officials were worried that the Chinese company could gain access to sensitive information about the navy's daily ship movements.

Ferrol is no ordinary port. It is the main Spanish naval base on the Atlantic and has served the Spanish Navy since the 18th century. Independent reporting on the project has noted that the facility sits close to Navantia, Spain's state shipbuilder, and that the area is considered strategically important for NATO's operations in the Atlantic (Nation Press, June 2026).

This is not an isolated case. The European Parliament has already flagged the wider pattern. In a 2024 resolution on port strategy, lawmakers called on the European Commission to present a framework limiting the financial and operational control that non-EU countries hold over ports in the bloc, warning that the growing presence of Chinese state-linked firms at core European ports has real consequences for the resilience and security of the whole network.

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Madrid Moves to Calm the Waters

Despite the warnings, Spain's political leadership appears determined to push the project through. According to a spokesperson for the Galician regional government, Defence Minister Margarita Robles personally called Galicia's regional chief on Tuesday to assure him that she would support the project when it reaches the cabinet for final approval.

The ministry insists there is nothing to worry about. The Galician government spokesperson said the Defence Ministry has been negotiating with SAIC for months and has expressed "no concern regarding security." A ministry spokesperson confirmed this stance directly to Reuters.

Still, the approval will not be entirely unconditional. The project must pass through Spain's Strategic Investments Committee, which may attach conditions on issues such as security — though the ministry has not said what those conditions might involve.

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A Wider Pattern of Chinese Investment in Spain

SAIC is far from alone. It is one of a growing number of Chinese car and battery makers signing deals to build plants in Spain, in some cases breathing new life into regions where car factories had previously shut down.

For a region like Ferrolterra, which has spent decades searching for a replacement for its declining naval-industrial economy, the SAIC deal is being sold locally as a historic opportunity, bringing an estimated 2,300 direct and indirect jobs. That economic pressure helps explain why Galician and national officials alike have been quick to defend the project publicly, even as their own intelligence services raise red flags behind closed doors.

Critics of closer economic ties with Beijing argue that cases like Ferrol illustrate a broader problem: European governments, eager for investment and jobs, are increasingly willing to accept the presence of Chinese Communist Party-linked, state-owned companies in areas that touch on national security — even when their own security agencies advise caution. Whether Madrid's assurances hold up once the factory is operational remains to be seen.

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Sources:

1. Reuters – "Spain set to approve Chinese car plant despite alleged security concerns," August 11, 2026: https://www.reuters.com/world/china/spain-set-approve-chinese-car-plant-despite-alleged-security-concerns-2026-08-11/
2. Reuters – "China's SAIC plans to build first EU car plant in Spain's Galicia region," June 1, 2026: https://www.reuters.com/world/china/chinas-saic-plans-build-first-eu-car-plant-spains-galicia-2026-06-01/
3. Reuters – "Spain courts Chinese firms, looks to EU ground rules," July 31, 2026: https://www.reuters.com/business/retail-consumer/spain-courts-chinese-firms-looks-eu-ground-rules-2026-07-31/
4. European Parliament – Resolution on "Building a comprehensive European port strategy" (2023/2059(INI)): https://oeil.europarl.europa.eu/oeil/en/document-summary?id=1772385
5. Wikipedia – "Ferrol Naval Base" (background/context on the site): https://en.wikipedia.org/wiki/Ferrol_Naval_Base

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