China emerges as a good trade and investment partner for Mexico

Once the trade agreement between Mexico, the United States and Canada (T-MEC) is in force, China can become the most important investor in the Latin American country.

Mexico has space to receive investment from China
Mexico has space to receive investment from China

Mexico already imports from China machinery, equipment, and semi-finished products, which depending on the cases, could go to the United States, Canada and other parts of the world.

Mexico already imports from China machinery, equipment, and semi-finished products, which depending on the cases, could go to the United States, Canada and other parts of the world.

In that role, it can be part of the new government's efforts to delineate the commercial pillars of innovation, inclusion, and diversification. Some supplies could come from China, others are Mexican, and the idea is that the North American production chain continues to grow.

Mexico already imports from China machinery, equipment, and semi-finished products, which depending on the cases, could go to the United States, Canada and other parts of the world.

Mexican exports also contribute to the promotion of ties between the United States and China, since part of the Chinese capital in the United States participates in the Mexican productive process and the finished products go to the United States.

Other commercial items are auto parts, steel, and iron or electronics, which together has made Chinese capital go from seven billion dollars in 2000 to 90 billion in 2018.

Mexico and China have common interests in global affairs and both are members of several multilateral organizations such as the International Monetary Fund (IMF), the World Bank, the United Nations Organization or the Group of 20 (G20).

In food and agriculture, Mexico is advancing sanitary protocols that allow it to export sorghum and bananas to China, which will be added to current sales of tequila, avocados, red fruits or pork, among others.

By Mexicanist Source Agencies

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Mexico-China trade amounts to 85 billion dollars in 2018

In 2018, bilateral trade between Mexico and China reached 85 billion dollars, of which 76 billion was the product of the importation of goods from the Asian nation, and about 9 billion Mexican exports; an amount that represented an increase of 32 percent in the last five years.

This was reported by Jorge Macías Jiménez, president of the National Chamber of Commerce, Services and Tourism (Canaco-Servytur) Tijuana during a meeting he held with the government delegation of Shandong Province, China. Meeting where they explored investment and trade opportunities; besides visualizing areas of economic cooperation that contribute to the development and well-being of both communities.

The leader of the Tijuana merchants assured that "we are in an excellent time to resume our commercial relationship, since the president of Mexico, Andrés Manuel López Obrador, has foreseen in this region a series of public policies and government measures that will create an environment more competitive to the productive activities, that at the same time will be an incentive to the foreign investment and development of strategic projects ".

In a statement, it was detailed that Macías Jiménez thanked the members of the Chinese delegation for their visit, and urged them to make their investments in Tijuana, in order to join new areas of cooperation and business opportunities in the Cali-Baja region.

At the meeting attended by Bernabé Esquer Peraza, Secretary of Economic Development of Tijuana; Carlos Arturo Higuera, president of Deitac and Zhang Xingchen, Secondary Inspector of the Provincial Department of Commerce of Shandong - the Chinese businessmen showed their gratitude to the Mexican authorities for the support they have received so far, and exposed the interest of investors of the nation Asian to open more business in Tijuana.

Mexico has space to receive investment from China

Mexico has space to accommodate investment from China and interest in taking advantage of the opportunities that arise, experts said, agreeing on the need to review and improve the relationship with the Asian country.

Undersecretary for North America of the Secretariat (Ministry) of Foreign Affairs (SRE) of Mexico, Jesús Seade, considered that it will be convenient for the country to improve its level of association with China through investment, instead of traditional Commerce.

"Chinese investment will grow gigantically in the production chain to address the US market, which is the largest in the world for them," said Seade on the sidelines of the event on the Mexico-United States-Canada Treaty (T- MEC) of free trade called "The commercial relationship in North America and the fate of the T-MEC", held this week.

"Then that Chinese interest to invest in Puerto Rico, Costa Rica, or to see where to export to the United States, we want it to be in Mexico," said the official.

According to his estimates, China could be the source of 75% of the total Foreign Direct Investment (FDI) of the world in the next 10 years.

In such a way that Mexico should concentrate more on China as a strategic partner since the success of a trade association with the United States, its neighbor and main participant in business matters is already guaranteed.

"There is a gigantic space in which we can try to accommodate China, in a closer relationship, especially in investment," said Seade, who was part of the negotiating team of the T-MEC.

"I think that it is increasingly inappropriate to concentrate exclusively on commercial issues, commercial flows or commercial problems, in a world in which more and more the relationship of countries takes place via investment".

According to the most recent data from the Mexican government, the FDI that Mexico received from China was 250 million dollars in 2018, while in the United States it received 12,274 million dollars.

The partner in Washington of the consulting firm Baker McKenzie, Miguel Noyola, considered that Mexico is in a very privileged position to have agreements with different regions, with a view to strengthening its productive export plant.

Mexico sends about 80 percent of its exports to the United States, but the Administration of President Andrés Manuel López Obrador, who took office on December 1, has proposed to diversify its destinations, including China.

With the T-MEC, a modern version of the North American Free Trade Agreement (NAFTA) that has governed since 1994, will open more export advantages, which could attract more investment from China.

"That's going to affect many industries here in Mexico, like final manufacturing, like vehicles or medical devices, in the agri-food industry and so on," Noyola said.

"I see that there is a very good opportunity (for Chinese investment) if things are done well and if the Government of the United States resists the nationalist temptation to apply more tariffs."

For his part, the former Undersecretary of International Trade Negotiations of the Ministry of Economy, Jaime Zabludovsky, indicated that Mexico should understand its link with China differently from other South American countries that are exporters of raw materials.

"But Mexico must undoubtedly take advantage of the investment opportunities that China is looking for," said the expert.

With the initiative of the Strip and the Road, launched in 2013, China is focused on the construction of infrastructure and trade networks to seek development and common prosperity.

Several countries in Latin America such as Brazil, Bolivia, Chile, Peru, and Venezuela have gradually joined the Chinese initiative, of which Mexico is not yet a part.

The coordinator of the Strategic Negotiations Advisory Council of the Business Coordinating Council (CCE), Moisés Kalach, agreed that now is a good time to increase interest in China.

"I agree with the concept of Chinese investment, and I agree that the relationship with China has to change," said Kalach, who was also part of the renegotiation of the T-MEC.

In 2013, Mexico and China agreed to increase their bilateral link to an Integral Strategic Partnership.