Photo credit: Sticker shock by Bev Sykes
While Mexico’s economy has been growing steadily since the implementation of NAFTA and various other free trade agreements with dozens of other countries, the general perception has been that the country’s main trading partners and investors have been the United States and Japan. However, Mexico’s partnership with manufacturing and economic powerhouse China has been gaining steam over the past few years and is showing positive signs of continued and expanding growth.
Mexican President Enrique Peña Nieto, on the evening before his visit to China, in a written interview with Xinhua, China’s top news service, spoke of his pledge to increase ties with China in a way that both countries can enjoy a win-win situation. China should and can be a “strategic partner” to the Latin American country, he said. Remarkable opportunities exist in many sectors, including infrastructure and trade.
“Mexico can be a gateway for China to enter North America, the world’s richest market. It can so be a point of access to several countries in Central America and the Caribbean.” said Peña Nieto. This could very well be of high interest to Chinese companies such as Huawei and ZTE, two telecoms companies who have been effectively shut out of the American telecom market, a market Chinese telecoms have been wanting to crack for quite a long time. While their products may still not get into the U.S. market, both ZTE and Huawei could become involved in the potentially lucrative Mexican telecom sector, where reforms have recently been passed to allow foreign investment.
President Peña Nieto continued, stressing the things that Chinese and Mexican people have in common such as an ancient culture and economic exchanges. After mentioning the above points of what Mexico can offer China, he spoke of what China can offer Mexico in return.
“For Mexico, China represents an opportunity to increase its productive investment, and multiply and diversify its export capacity. China’s economic dynamism, the size of its market and its high demand for goods, turn China into an attractive market for Mexico.” he said.
In order for an economic partnership to be long-lasting and beneficial for both sides, the Mexican head of state mentioned that friendship and cultural understanding are key. The expansion of China’s Confucius Institute in the Spanish-speaking country would be a very effective way for Mexicans to learn about China’s traditions and learn Mandarin, while Mexico can increase the awareness of Mexican culture in China by the means of Spanish-language courses and showing Chinese people “the opportunities that Mexico can offer them”.
Most importantly however, the Mexican president stated how an economic partnership would be beneficial to both countries in the energy and infrastructure industries. China is a country that imports much of its energy, and Mexico has massive reserves of oil and gas; the country’s oil industry needs an overall upgrade, which Chinese companies could very well provide if reforms to Mexico’s energy sector go through.
Furthermore, the president mentioned that when it comes to trains: “China is, without doubt, an excellent model on the issue” he said. “We have much to learn from its successful history in railway infrastructure.”
The Communications and Transport Ministry of Mexico has recently implemented a five-year plan to build new railways; an expanding trade relationship could mean that Chinese companies may be consulted or involved.