Photo credit: Chinese Money by Steve Parker
Mexican President Enrique Peña Nieto visited China in April with an eye on a more balanced trade relationship, and Chinese President Xi Jinping visited Mexico earlier in June of this year with the same objective in mind; increasing commercial and cultural ties between the two nations.
As it stands at the moment, Mexico exports about $5.7 billion in goods including copper, minerals, oils, cotton, and car parts to China, but Mexico imports $57 billion worth of goods from China. These goods include plastics, toys, furniture, and electronics.
Before Xi’s arrival in Mexico City, Mexican Foreign Minister Jose Antonio Meade stated: “With China, the second-most important economy in the world, Mexico has a relationship that is far from the importance it should have. Mexico’s presence in China is well below its potential, as is China’s in Mexico.”
Peña Nieto is focused on making economic prosperity the “cornerstone” of his presidency, and he believes improved ties with China are of upmost importance. During his trip to China, he made an agreement to send China 30,000 barrels of oil a day, an amount he hopes will increase. President Xi also mentioned the possibility of a free trade agreement between the two nations.
It appears as though oil will present one of the largest opportunities for Chinese companies in Mexico: if legislation passes allowing foreign investment in the country’s oil sector, China could very well be the nation that could modernize the aging, outdated infrastructure and provide the know-how needed for deep water oil exploration. China would benefit greatly: China is an energy hungry nation and it needs to secure energy resources from as many sources as possible.
However, oil is not the only sector where opportunities exist for Chinese companies. During his visit to China, the Mexican president spoke of the expertise the Chinese have in the field of national infrastructure and how Mexico could benefit greatly from Chinese companies investing in and building much needed public transportation infrastructure. The telecommunications industry is also opening up to foreign investment; Chinese investment could be crucial in the Mexican drive to provide affordable, high quality telecommunications to all of its citizens.
Furthermore, during Xi’s visit, the Chinese were seeking to sign over a dozen agreements in trade, tourism, energy, science, and technology; these agreements weren’t signed, but interestingly, deals were made on commercial defence, access for Mexican tequila, and for Mexican pork to the Chinese market.
Rafael Valdez Mingramm, who promotes trade with Asia in general and China in particular, is an entrepreneur in Mexico and author of a book detailing the last four decades of Mexico-China relations and ties. He wrote: “China must be perceived, not as a threat, but as a great opportunity for Mexico and Latin America.”