Mexico’s President,Enrique Peña Nieto,is dedicated to boosting trade with China and has already begun to take steps that will move the two nations toward an expanded partnership that is also likely to benefit the United States. Labor costs have been rising in China during recent years,while Mexico has been working to gain access to the Chinese market,causing a shift in the relationship between these two manufacturing superpowers.
“The United States and Mexico can find new fuel for economic growth and help each other reduce their gaping trade deficits with China by working together to sell more goods to the swelling Chinese middle class,” writes The Washington Post.
According to new research that was released by Bank of America Merrill Lynch,hourly wages in Mexico are now around one-fifth lower than China. In addition,as Latin America’s second largest economy,Mexico is experiencing strong population growth,giving it an advantage over China in the U.S. Also of note,a variety of reforms that have been proposed by Peña Nieto are expected to boost Mexico’s already booming economy,while lower production costs and projected productivity gains are expected to play a role in the growing popularity of Mexico real estate for manufacturers.
Duncan Wood,the director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington reportedly called China “a land of enormous opportunity,” going on to say that “China is a market that is untapped for Mexican business.”
In a meeting last month with China’s President Xi Jinping,Peña Nieto signed several new commercial agreements,including a guarantee to ship at least 30,000 barrels of oil a day to China,which is also Mexico’s second largest source of imports at nearly 15 percent. Today,China is Mexico’s third largest export market and Mexico is Hong Kong’s second-largest trading partner in Latin America. In 2011,bilateral trade between the two nations rose by more than 17.3 percent,up from an average of 8.6 percent over the previous three years.
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