The United States remains Mexico’s biggest trading partner by far, but Donald Trump’s “America First” policy has Mexican companies looking for different options. With the renegotiation of NAFTA coming up, the Latin American nation is looking to China.
Financial experts suggest that an increase in bilateral trade could benefit both economies, and provide Mexico with strategic leverage in trade talks with its northern neighbor.
In an exclusive interview with CGTN America, Alicia Bárcena, the United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) Executive Secretary said there is a “huge opportunity for China and Latin America to establish a new relationship in different sectors such as science, technology and cultural interchange.”
Bárcena recently participated in the ‘Belt and Road’ forum in Beijing, where experts suggested a third route to expand the financial opportunity within the region, one that would stretch from southern China to Latin America.
The Chinese Economic and Commercial Counselor in Mexico, Zou Chuanming says both countries have a lot of space to expand the cooperation, “principally with the structural reforms in the energy sector”.
According to the Chinese embassy, investments in Mexico totaled $52 million in 2016, a number they expect to grow in the upcoming years. Currently most Chinese imports to Mexico are “intermediate goods,” parts that go into products assembled in Mexico. Chuanming says there are more Chinese firms looking to diversify, possibly by investing in the construction of hydroelectric projects.
Bilateral cooperation is also taking big steps in the private sector. The IFC Asset Management Company launched its China-Mexico private equity fund in 2014, announcing it will invest $200 million in Citla Energy, a new Mexican oil company. Cesar Urrea, the fund’s director says that Mexico “recently opened up sectors that were not allowed for private investment in the past, so China is taking interest.”
The Mexican Foreign Ministry says it would like to do even more business offsetting a steep trade deficit with Beijing by exporting more “Made in Mexico” goods to China.