If Mexico is the new China, what does Mexico think of China?
Last Sunday’s New York Times featured an op-ed by former Wired editor turned drone entrepreneur Chis Anderson under the headline, "Mexico: The New China". The piece made the case that Mexico’s skilled workforce, low costs and proximity to the United States "might hold the long-sought answer for how American manufacturers can compete with those in ...
Last Sunday’s New York Times featured an op-ed by former Wired editor turned drone entrepreneur Chis Anderson under the headline, "Mexico: The New China". The piece made the case that Mexico’s skilled workforce, low costs and proximity to the United States "might hold the long-sought answer for how American manufacturers can compete with those in China, India and the next generation of economic powerhouses."
It seems a little odd that Anderson thinks making stuff cheaply in Mexico is a revolutionary concept in American business – the real story here may be just how China-centric the American business press has been in recent years – but in light of the frequent comparisons between the two emerging economies, it’s interesting to see some news his week on how they relate to each other.
McClatchy reports on the growing backlash to a planned Chinese expo center near Cancun:
The proposed complex would house 3,040 showrooms, divided among 14 industrial sectors and targeting wholesalers from across Latin America. Projections estimate that it would draw 1 million people a year to a resort that already is the most popular beach destination in the Western Hemisphere.
But just one month ahead of its expected groundbreaking, the $180 million Dragon Mart Cancun is drawing loud objections from an odd alliance of Mexican environmentalists, who worry about the predicted surge in visitors, and business interests, who fear competition from inexpensive Chinese imports.
"We categorically and overwhelmingly oppose the initiative to install a Dragon Mart on our national territory," the Confederation of Industrial Chambers of Mexico, the nation’s largest industrial group, said in a statement last month.
Emilio Godoy puts the affair in the context of generally cooling relations between the two countries:
The experts consulted described the two countries’ relations as "dysfunctional" and observed that the problem is more than economic.
In October 2012, the Felipe Calderón administration (2006-2012) filed a complaint against China with the World Trade Organisation (WTO), accusing it of granting subsidies prohibited by that body to textile and garment industries, a sector in which China and Mexico compete for the United States market.
In the first week of January, one of Peña Nieto’s first measures as president was to postpone a 25-20 percent tariff reduction for Chinese garments and footwear until 2014, in response to a demand from local textile and shoe manufacturers.
The poor relations between these two nations have had numerous repercussions, including Mexico’s failed bid for the International Monetary Fund’s head position in 2011, as China turned its back on Mexican candidate Agustín Carstens.
Given that the rapid growth of both countries has depended largely on the U.S. consumer market, it makes sense that they would be competitors. As we’ve written before, Mexico’s leaders sometimes seem to display an odd inferiority complex about Chinese growth despite the fact that Mexicans are by and large wealthier and enjoy a far higher quality of life.