Mexico seeks to balance books with mainland

Mexico is looking to reduce its multibillion-dollar trade gap with the mainland by attracting new investment, its ambassador to China said.

In an exclusive interview with the South China Morning Post, Jorge Guajardo said Beijing had promised his country it would buy more Mexican products or encourage more Chinese to travel to Mexico because of the yawning trade gap.

'For every dollar we sell to China, we buy US$15 of Chinese goods. That's something we've tried to work out with the Chinese leadership,' Mr Guajardo said. 'We need to find creative ways to balance the commercial situation, because big trade deficits do not favour anyone in the long run.'

Mexican government figures show the country's trade deficit with the mainland was US$32.7 billion last year. The ambassador stressed that attracting mainland investment to Mexico would be one of the best ways to narrow the gap.

'There are very clear reasons why we want to do that. We have recently been reading how manufacturing in China has become more and more expensive,' he said, referring to a report by global economic consultancy AlixPartners on outsourcing on the mainland, in Mexico and other countries.

The consultants' report said that Mexico had leapfrogged the mainland in low-cost country rankings because of low oil prices, the global economic meltdown, and currency fluctuation.