Trade is a hot topic as Chinese president travels to Mexico
| Mexico City
When China鈥檚 president meets with his Mexican counterpart here this week, the two men will try to revive a relationship that has cooled in recent years.
Chinese President Xi Jinping arrives in Mexico today for a three-day visit in which he and Mexican President Enrique Pe帽a Nieto are expected, among other things, to discuss economic cooperation. The visit comes soon after Mr. Pe帽a Nieto鈥檚 April trip to China 鈥撀燼 quick diplomatic turnaround that experts say augurs a new stage in the relationship.
The two countries are trading partners, but they are also competitors, especially in exports to the lucrative US market. Mexico was the last country to approve China鈥檚 entrance to the World Trade Organization in 2001, largely because it foresaw the potential for fierce competition. China's share of goods sold in the United States subsequently ballooned, more than doubling to 19 percent, according to the US Commerce Department; Mexico's share remained stagnant at 12 percent.
Chinese trade with Mexico grew enormously between 2001 and 2012, from $3.2 billion to more than $62 billion.聽But the balance is heavily tipped by a factor of 10 to 1 toward China. The value of Chinese exports to Mexico amounts to $57 billion, while what Mexico exports to China has a value of $5.7 billion.聽Mexico is the region鈥檚 top exporter of manufactured goods and would like to export far more of its products to China.
鈥淏usinesspeople feel 鈥撀燼nd it鈥檚 not just a feeling 鈥� that Mexico has a very open commercial structure, including free-trade agreements with 44 countries, and that China is not acting in very reciprocal terms,鈥� says Enrique Dussel Peters of the Center for China-Mexico Studies at Mexico鈥檚 National Autonomous University.
Despite lowered tariffs required by the WTO, China has managed to erect other barriers to Mexican exports of pork, seafood, and tequila, among other products. Freer trade will likely be on the table聽this week.
There are other sticking points in the relationship as well. The two nations traded barbs over the 2009 H1N1 flu virus epidemic after the Chinese government ordered the quarantine of apparently healthy Mexican citizens in the country, and China objected to the Mexican government鈥檚 2011 reception of Tibet鈥檚 Dalai Lama.
But things have changed. China became the world鈥檚 biggest trading nation last year, eclipsing the US. Mexico has long had a strong trading relationship with the US, with 80 percent of exports moving north to the States. However, because of this, the US recession hit Mexico hard, and there have been increased calls to diversify its trading partners. Mexico鈥檚 Pe帽a Nieto has repeatedly promised to look east.
China's 'quest'
Until now, China has largely overlooked Mexico, even as it strengthened ties with other Latin American and Caribbean nations in its hunt for natural resources. Of the $25 billion invested by largely state-owned Chinese companies in the region between 2000 and 2011, Mexico captured less than 1 percent of the investment, according to Mr. Dussel Peters.
China鈥檚 Xi may now see promise in Mexico鈥檚 energy sector, especially since Pe帽a Nieto has stoked talk of reforms that could open the national oil company to limited foreign investment and potentially boost production (as well as exports to China).
鈥淐hina is clearly on the quest for oil and natural gas from the region,鈥� says Eric Farnsworth, vice president of the Council of the Americas in Washington.
It鈥檚 a way for China to secure future economic expansion, Mr. Farnsworth says 鈥� 鈥渕uch less a strategic play in terms of politics and much more an economic play. It鈥檚 not to displace the US. I don鈥檛 see that as their endgame.鈥�
China and Mexico initiated their modern bilateral ties in 1972, when President Luis Echeverr铆a of the long-ruling Institutional Revolutionary Party (PRI) and his counterpart Mao Zedong formally established a diplomatic relationship.
China and Mexico celebrated four decades of diplomacy last year, which may have also marked the low point of the relationship, says Dussel Peters.
Among the Chinese, there is 鈥渁 sense that the PRI government is better equipped to deal with China than the PAN,鈥� the National Action Party, which ran Mexico鈥檚 previous two governments, says Margaret Myers of the Inter-American Dialogue鈥檚 Washington-based China and Latin America program. 鈥淭here is an excitement about reengaging with the PRI.鈥�
Xi visited Trinidad and Tobago and Costa Rica before he arrived in Mexico today. He is scheduled to meet with President Obama over two days, June 7 and 8.
