Mexico turning more to China

As relations with US cool, country sees benefits of trade with China

Mexico is seeking to strengthen comprehensive ties with China and attract investment since the election of Donald Trump as president of the United States, which has recently taken a more confrontational approach toward its southern neighbor.

Trump has threatened several times that the US will charge tariffs on imported cars assembled in Mexico, such as from Toyota, Ford and Volkswagen. The US is the market for 80 percent of Mexico's exports.

Ford last month announced it would cancel plans to build a $1.6 billion factory in Mexico.

On Feb 1, Mexico announced a $212 million deal to assemble and distribute cars labeled by Chinese automaker JAC in the central state of Hidalgo.

"The plant will begin with a capacity of 11,000 vehicles a year, with that ultimately rising to 40,000. The initial phase of the project is expected to create 1,000 direct and 4,500 indirect jobs," said Omar Fayad, governor of Hidalgo.

Roberto Delavalla, an economics professor, said that the Mexican auto industry relies too much on investment from the US, ignoring potential deals with China, Japan, Republic of Korea and Germany.

Ildefonso Guajardo, secretary of the economy of Mexico, said that with cooperation with the Chinese automaker, Mexico will be able to meet any industry challenges.

"We want to attract investment and continue to strengthen our ties with China in a comprehensive way," Mexico's Foreign Affairs Minister Luis Videgaray told senators from the ruling Institutional Revolutionary Party (PRI) on Jan 30.

Trump recently withdrew the US from the Trans-Pacific Partnership (TPP), a wide-ranging trade deal among more than 10 economies, including Mexico.

"Regarding China, we have to remember that it is a country with which we have elevated our relationship, the character of our comprehensive strategic partnership, and we are seeing an increase in the flow of trade," Videgaray said.

Meanwhile, according to Chinese officials, the country's Silk Road Economic Belt and 21st Century Maritime Road initiatives will help boost international cooperation at a time when the possibility of isolationism is growing due to sentiments expressed by the US.

The Belt and Road Initiative, promoting infrastructure projects along historical land and sea trade routes, is helping "align China's development with that of other countries", State Councillor Yang Jiechi said.

"The export of Mexican agricultural products to China is increasing by 20 percent every year; meanwhile, Mexico is offering China more options of agricultural goods. In terms of electronic products, Mexico is the first supplier to China in Latin America," said Julian Ventura, Mexican ambassador to China.

The Mexican government has pushed reforms recently, one of which is the permission for foreign investment to go into the domestic energy industry. In bidding for oil exploration rights off the Mexican coast, China's CNOOC acquired two areas.

"Lenovo, Huawei, Haier have been placing more and more investments in Mexico lately," Ventura said. "Chinese automakers are assembling and selling cars in Mexico, which is all the result of cooperation between the two countries."