China’s 'Period of Strategic Opportunity' in Mexico

Mexico's President Enrique Pena Nieto (L) shakes hands with China's President Xi Jinping during a welcoming ceremony at the Asia Pacific Economic Cooperation (APEC) summit at the International Convention Center at Yanqi Lake in Beijing

Beijing is looking to cash in on Trump's rhetoric against Mexico and NAFTA.

In addition to the Alibaba deal, Chinese national oil company CNOOC made headlines when it won rights to develop two deep-water blocs in Mexico’s Perdido Fold Belt in late 2016. And Mexico’s Giant Motors, which is partially owned by billionaire Carlos Slim’s Grupo Financiero Inbursa, signed a deal in early 2017 with Anhui Jianghuai Automobile (JAC Motors) to jointly invest approximately $200 million to build JAC model SUVs in Hidalgo, Mexico. China Southern Airlines will also strengthen ties with a first-ever flight to Mexico, which connects the southern metropolis of Guangzhou to Mexico City through Vancouver. Connections are otherwise limited to AeroMexico’s Mexico City to Shanghai route and Cathay Pacific freight service.

Prospects for enhanced China-Mexico ties are also presumably bolstered by recent developments in the trade relationship. Mexico’s extensive trade deficit with China has been a sticking point for Mexican policymakers for decades, but the trade dynamic is improving somewhat, according to reports from the Chinese Ministry of Commerce. Bilateral trade in goods increased by $1.78 billion, or 5 percent, between the first half of 2016 and the same period in 2017, reaching a total of $37.3 billion. In addition, due to growth in Chinese imports from Mexico, the South American nation’s $30 billion trade deficit with China reportedly shrunk over the past two years.

Mexico is additionally seeing minor improvements in access to the Chinese market. One trade-based initiative, the Henan-Guadalajara “Air Bridge,” which has been in the works since 2015, will facilitate the transport of Mexican beef, pork, melon, and papaya, in addition to other agricultural products to Henan, an interior Chinese province and key entry point for foreign meat and produce.

This all amounts to concrete steps in cross-Pacific relationship-building. Still, Mexico’s China experts aren’t holding their breath.

Some are skeptical of China’s recent overtures, or of Mexico’s capacity to act on them. Mexico’s former ambassador to China, Jorge Guajardo, has been openly critical of Mexico’s sudden interest in a relationship with Beijing. In a 2017 opinion piece in Mexico’s Reforma newspaper, he argued that due to a lack of economic complementarity between the two countries, every second Mexico commits to developing partnerships with China “is a second wasted.” Mexican China specialist Enrique Dussel Peters has also criticized those in Mexico who argue for a hasty shift in policy, stating in a March El Tiempo article that “Mexico is not institutionally ready for a medium or long-term relationship with China.”

Mexican officials have also downplayed growing China relations, suggesting that ties to China are mainly useful in their country’s dealings with the United States. During this year’s Mexico Business Forum, Secretary of Economy Ildefonso Guajardo Villarreal indicated that Mexico would “use [the president’s China visit] geopolitically as strategic leverage” with the United States during NAFTA renegotiation. And former Mexican Foreign Minister Jorge Castañeda characterized Mexico’s growing interest in China as an “expression of ‘machismo’” directed northward.