Tuesday, April 30, 2024

Manufacturing in Mexico is having its moment. The US is buying in — and so is China

, CNN - Published 9:40 PM EDT, Sun April 28, 2024

As US supply chains decouple from China, Mexico’s manufacturing sector is emerging as a winner.

As nearshoring continues and global supply chains are reorganized, Mexico’s manufacturing sector has an opportunity for long-term success.


Mexico surpassed China as the top exporter to the US in 2023. Those exports were driven by manufacturing, which comprises 40% of Mexico’s economy, according to Morgan Stanley.


US imports from Mexico continued to increase in February, according to April 4 trade data released by the Commerce Department. Meanwhile, Chinese exports to the US were down 20% in 2023, compared to 2022.


Amid shifting geopolitics and competition, US and Chinese companies both see potential in Mexican manufacturing: Low labor costs, geographic proximity to American markets and the US-Mexico-Canada (USMCA) agreement — a free trade accord established in 2020 that makes trade in North America more cost-effective and efficient — are all factors contributing to a potential boom.



Monday, February 05, 2024

Why Chinese companies are flocking to Mexico

Nov 23rd 2023|mexico city

Chinese investments have been pouring into Mexico lately. Last month alone brought two notable ones. The government of Nuevo León, a northern state bordering the United States, announced that China’s Lingong Machinery Group, which makes diggers and other construction equipment, would build a factory that it estimates will generate $5bn dollars in investment. The same day Trina Solar, a solar-panel manufacturer, said it would invest up to $1bn in the state. Both companies and their corporate compatriots can now find a home away from home at Hofusan, a Chinese-Mexican industrial park in Nuevo León.

Chinese companies’ heightened interest in Mexico dates to 2018 when Donald Trump, America’s president at the time, launched a trade war that included raising tariffs on imports from China. His successor, Joe Biden, has kept the tariffs in place. Mr Biden’s own America-first policies, such as the Inflation Reduction Act, are encouraging companies to consider “nearshoring” in North America, in large part to thwart China. The pandemic and the snarl-ups in supply chains it caused also pushed manufacturers to move closer to the American market.


Thursday, January 04, 2024

Mexico: Nearshoring, Foreign Investment Create Industrial Opportunities


By: C. Kat Grimsley, Ph.D. and Héctor Salazar Sánchez, Ph.D.


Industrial real estate emerged as a clear winner during and after the COVID-19 pandemic thanks to increased demand for e-commerce, a new emphasis on nearshoring and greater investment in logistics solutions.


In particular, Mexico, with its proximity to the U.S. consumer market, has seen substantial growth in industrial development in recent years. Although notably smaller than the neighboring U.S. market, which has 14.5 billion square feet of industrial property, the Mexican industrial market encompasses 908.5 million square feet across all product types.


In 2022, 65% of Mexico’s industrial space construction was concentrated in just four cities — Mexico City (20%), Monterrey (19%), Ciudad Juarez (16%) and Tijuana (10%), the last three of which are states that border the U.S. and have greatly benefited from nearshoring.



Wednesday, November 08, 2023

China’s $9 Trillion Debt Problem Is A Global One, Too


Article by William Pesek


Economists wondering where China’s economy is heading have a Lehman Brothers problem on their hands.


Too often, analyses on the more than $9 trillion of debt that state banks and other creditors are owed by China’s local government investment arms are framed around a 2008-like crisis. Blame it on breathless speculation about the “Lehman moment” many believe is sure to devastate Asia’s biggest economy.


The common thread is a realization that a Chinese model that worked so well for three decades is facing an existential crisis. Even if China doesn’t plunge into a crisis that shakes the globe, the rapid growth needed to surpass the U.S. economy by 2030 or 2040 seem over.



Tuesday, August 29, 2023

MIT and Tec de Monterrey team up to boost innovation in Mexico




In collaboration with Tec de Monterrey, the Massachusetts Institute of Technology (MIT) has presented the MIT REAP Focus Mexico initiative, an entrepreneurship acceleration program from MIT.


The aim of the initiative is to identify and propose projects and programs that foster social and economic development through science, technology, innovation, and entrepreneurship.


Five work teams have been assembled across Mexico in Chihuahua, Querétaro, Guadalajara, Guanajuato, and Mexico City. Participating in each group are universities, government, entrepreneurs, and companies that will promote initiatives to accelerate development.


MIT REAP Director Travis Hunter explained that the aim of this program is for enterprising communities from around the world to get involved with MIT to strengthen business ecosystems through innovation.



Wednesday, August 09, 2023

Mexico seeks to solidify rank as top U.S. trade partner, push further past China

Luis Torres - July 11, 2023

Mexico became the top U.S. trading partner at the beginning of 2023, with total bilateral trade between the two countries totaling $263 billion during the first four months of this year.
Mexico's emergence followed fractious U.S. relations with China, which had moved past Canada to claim the top trading spot in 2014. The dynamic changed in 2018 when the U.S. imposed tariffs on China’s goods and with subsequent pandemic-era supply-chain disruptions that altered international trade and investment flows worldwide.
Mexico’s gains mirror its rise in manufacturing, a key component of goods moving between it and the U.S. During the first four months of 2023, total trade of manufactured goods between Mexico and the U.S. reached $234.2 billion.
Mexico positioned as a manufacturing base
Mexico’s expanding manufacturing base has offered an alternative to producing in China. Sourcing or producing goods in a nearby country is sometimes referred to as “nearshoring.”
More activity in Mexico would support increased bilateral manufacturing with the U.S. It would also bolster Mexico’s standing as the U.S.’ leading manufacturing trading partner, a ranking it achieved in 2022.
Luis Torres is a senior business economist in the San Antonio Branch of the Federal Reserve Bank of Dallas.

Wednesday, December 07, 2022

TSMC triples Arizona chip plant investment, Biden hails project


By Steve Holland and Jane Lanhee Lee

PHOENIX, Ariz., Dec 6 (Reuters) - Taiwanese chipmaker TSMC (2330.TW) on Tuesday said it would more than triple its planned investment at its new Arizona plant to $40 billion, among the largest foreign investments in U.S. history, as President Joe Biden visited and hailed the project.

The expanded investment is a big win for Biden after supply chain issues disrupted the U.S. economy early in his presidency.

Biden's recent trip to Asia convinced him the United States is in a better position to lead the world economy in the years ahead "if we keep our focus," he said.

Mark Liu, chairman of Taiwan Semiconductor Manufacturing Co Ltd, known as TSMC, estimated annual revenue of $10 billion when the two planned chip fabrication plants open, adding that customers would have annual sales of $40 billion from products using chips made there.