Chinese enterprises expand and extend their chains here

On December 5th, a B777 cargo plane operated by China International Cargo Airlines, loaded with cross-border e-commerce goods, took off from Shenzhen Airport and landed smoothly in Mexico City after stopping at Anchorage. This marks the smooth opening of Shenzhen's round-trip route to Mexico City, promoting efficient exchange of cross-border e-commerce goods between China and Mexico, and continuously consolidating bilateral economic and trade cooperation.

This year marks the tenth anniversary of the establishment of a comprehensive strategic partnership between China and Mexico. Mexico has become China's second largest trading partner in Latin America, with a total trade volume of 94.965 billion US dollars in 2022 (according to Chinese statistics). To further strengthen bilateral economic and trade relations, high-level interactions between China and Mexico have been frequent. On December 6th, Vice President Han met with Mexican Foreign Minister Balsena in Beijing; On December 5, Wang Yi, member of the Political Bureau of the CPC Central Committee and Minister of Foreign Affairs of Minister of Foreign Affairs Wang Yi, met in Beijing with Mexican Foreign Minister Marc Balsena, a series of highlights of China Mexico relations, reflecting the thoroughfare of the comprehensive strategic partnership between the two countries.

With the increasing trend of US trade protectionism policies, the tax burden and channels for Chinese exports to the United States have been greatly affected. Starting from 2023, the scale of US imports from Mexico has surpassed China for the first time. In the first six months of this year, the proportion of Chinese goods in US trade imports has dropped to 13.2%, a new low since 2003. China's ranking among US trade importing countries has fallen to fourth place, behind the European Union, Mexico, and Canada. At present, the EU, Mexico, Canada, and China account for 18.5%, 15.2%, 13.5%, and 13.2% of imports to the United States, respectively. Before the US launched a super trade war against China in 2018, China accounted for as much as 21% of US trade imports. Under the changing international trade situation, China has adopted the policy of further expanding reform and opening up, multi regionalized and diversified industrial chain layout, and actively co built the "the Belt and Road", opening up more space for Chinese products to integrate into the international market.

A study published by the Bank for International Settlements in October showed that since 2021, the supply chain between China and the United States has become more complex as more trade is transferred elsewhere. Although the proportion of Chinese direct exports to the United States has decreased, many of the goods supplied to the United States still originate from China, which is also one of the roles of Chinese companies actively investing in markets such as Mexico and Vietnam.

From Chinese enterprises participating in the construction of the Maya Railway to the opening of the first direct freight route from mainland China to Latin America from Wuhan to Mexico City; From the accelerated development of China's light rail trains in the industrial hub of Monterey, Mexico, to China's 5G and cloud technology leading the Mexican consumer market, there are various highlights of facility connectivity cooperation, and the economic and trade relationship between China and Mexico is becoming closer and more diversified. Especially since the escalation of the economic and trade friction between China and the United States in 2018, the global supply chain has undergone profound changes. As a member of the North American Free Trade Agreement and a direct beneficiary of policies such as friendly and nearshore outsourcing in the United States, Mexico has utilized its geographical advantage of being close to the United States to transfer and undertake a large amount of goods and production line transfers from China, further expanding the potential for economic and trade cooperation between China and Mexico. Chinese car companies such as BAIC, Chery, and Changan have gathered in Mexico to expand their presence. Automotive parts listed companies such as Topp Group, Xinquan Group, Xusheng Group, Aikodi, Rongtai Group, Bertelli, Sanhua Intelligent Control, Daimei Group, Yinlun Group, and Shangsheng Electronics have already mass-produced their own products in Mexico, supplying them to nearby partners and accelerating the process of product globalization and matching. The accelerated entry of Chinese manufacturing into Mexico has also brought tangible revenue growth to enterprises.

Nowadays, cooperation between China and Mexico continues to deepen, and Mexico has become the largest market for China's vehicle exports in Latin America. The purpose of Chinese companies investing in Mexico is not limited to its local market, but to value its function of radiating to the North American Free Trade Area and the entire American market in Central and South America, especially the neighboring advantage of Mexico adjacent to the United States, the world's largest consumer market.

Economists from Harvard Business School and Tucker Business School at Dartmouth University in the United States have found that trade ties between the United States and Vietnam and Mexico are becoming increasingly close, with nearly a quarter of Vietnamese exports and nearly 80% of Mexican exports coming to the United States. But at the same time, trade between Vietnam, Mexico, and China is also increasing day by day. In the past five years, China has been the country with the largest increase in Mexico's import share. According to official data released by Mexico, the bilateral trade volume between China and Mexico reached a historic high of 128.7 billion US dollars in 2022. According to data from the General Administration of Customs of China, the total import and export value between China and Mexico in the first 10 months of 2023 reached 585.6 billion yuan, a year-on-year increase of 12.4%. Among them, China's exports to Mexico amounted to 476.01 billion yuan, a year-on-year increase of 12.0%; China's imports from Mexico amounted to 109.59 billion yuan, a year-on-year increase of 14.3%.

China and Mexico have set the goal of strengthening pragmatic cooperation based on their respective development strategies, and have achieved trade balance by supporting Mexico in increasing exports to China and creating favorable conditions for Chinese investors. Undoubtedly, both China and Mexico intend to consolidate and enhance this win-win cooperation, pushing bilateral economic and trade relations to new heights.