Mexican President Felipe Calderon [travelled to China last] week...What is the outlook for economic and trade ties between the two countries? Are Mexico and China more rivals than partners?
Francisco Gonzalez, Riordan Roett Assistant Professor of Latin American Studies at Johns Hopkins University's School of Advanced International Studies: Mexico has lost considerable ground to China's impressive export machine. But Mexico also possesses a unique comparative advantage over China, which is proximity to the US. Proximity is President Calderon's trump card when he visits China. While it makes perfect sense to produce lightweight goods such as apparel, toys, and most household goods in the lowest-cost economy—regardless of its geographic location—the most cost-effective and efficient way to export heavy goods such as cars, airplanes, electronics, hardware, and, crucially, goods and services whose timely delivery is key for good business outcomes is proximity to market. The best way for Mexico to benefit from China's exporting power is by offering joint ventures and partnerships with Chinese public and private firms. Chinese partners would gain the advantage of location, which would help China's next generation of exports as the country moves up the production ladder. In turn, Mexican partners would gain access to capital and, very importantly, to Asian business know-how, given how strongly integrated China's firms are (as the assemblers of finished products—not unlike Mexico—whose inputs come from Japan, South Korea, and many southeast Asia countries). It is high time for Mexico to enhance its diplomatic and economic presence in the Asia-Pacific region, the strongest source of global growth in the next generation.
http://www.latinbusinesschronicle.com/a ... px?id=2569
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