Stronger China relations underline Mexico’s look-East policy
Enrique Peña Nieto says bilateral trade and investment links, in fields ranging from agricultural goods to energy, are growing in tandem with more robust political exchanges
The Asia-Pacific region continues to be the world leader in growth and it will play a defining role in the future of the global economy. Therefore, it has been a top priority for the Mexican government to strengthen its ties with key Asian partners, especially China, a fundamental player in the international arena and an indisputable pole of growth and development.
Since the start of both my term in office and that of President Xi Jinping, we have imprinted our bilateral ties with an unprecedented dynamism through a continuous exchange of high-level visits and persistent encouragement of bilateral trade and investment. This is my fourth visit to China as president of Mexico, and the seventh time I will meet President Xi.
In 2013, our countries upgraded our relationship into a comprehensive strategic partnership. Undoubtedly, this was a decisive step in broadening and deepening our political, economic and cooperation links. This partnership has allowed us to create specialised mechanisms to strengthen our exchanges in all areas.
In the economic track, the high-level business working group and the high-level investment working group seek to help Mexican and Chinese companies build solid ties, facilitate the establishment of alliances and identify profitable business opportunities.
Through the working group, we established a bilateral investment fund with capital of US$2.4 billion. Its mission is to stimulate investment in strategic sectors for both countries, such as telecommunications and energy. So far, the fund has invested in two projects in Mexico: one in the field of oil exploration and production and another in the shared telecommunications network – Mexico’s most ambitious telecoms project.
Moreover, the Industrial and Commercial Bank of China, the world’s largest bank, began operations in Mexico in 2015, providing a platform that further facilitates trade and investment between our countries.
Additionally, President Xi and I have been working on increasing air connectivity between our countries. Two airlines now directly connect Mexico and China (Aeromexico and China Southern), with eight weekly flights. As a result, we have seen a positive impact on flows of business and leisure travel.
All these actions have landed concrete results. Our bilateral trade continues to grow at a steady pace. The access of many Mexican agricultural and food products to the Chinese market has increased significantly. Today, we are exporting beef, other meat and by-products of pork, blackberries, raspberries and blueberries, and tequila, to name a few of the new markets that have opened in the past couple of years.
Currently, China is Mexico’s second-largest trading partner and Mexico is China’s second-largest trading partner in Latin America. In 2016, our bilateral trade surpassed US$75 billion, which represents almost 10 per cent of our total trade worldwide.
In terms of investment, a growing number of Chinese companies are discovering opportunities to invest in Mexico: more than half (US$309 million) of the total foreign direct investment of Chinese origin in Mexico has arrived in the last 4½ years up to June this year. Now, more than 1,100 Chinese companies operate in our country.
Similarly, as a result of Mexico’s recent energy reform, which opened up that sector to private investment, Chinese enterprises are inaugurating a new chapter in Sino-Mexican relations. Last year, the China National Offshore Oil Corporation won two of the 10 deep-water oil blocks at auction for offshore exploitation in the Gulf of Mexico.
The invitation from President Xi to participate in the Dialogue of Emerging Markets and Developing Countries on the sidelines of the 9th BRICS Summit being held in Xiamen, Fujian, is clear proof of the strong political dialogue we have built.
Even though we have made great progress, we still have a long road ahead of us. China and Mexico are fundamental allies. Both President Xi and I are firmly committed to continue working together in order to achieve an even greater development and prosperity for our societies.
Enrique Peña Nieto is president of Mexico