Nearshoring: the opportunity that Mexico has, but with an expiration date

China loses ground in the US

Although China continues to be the main supplier to the United States, the Asian giant has lost presence in the US market, said Vázquez, a BBVA executive, something that Mexico has not taken full advantage of.

He added that of the five percentage points that China lost in the United States, Mexico was left with less than 1%. Vietnam was the most benefited, going from 2% to 4%. “We have calculated that, with the 15% that we would have kept from the trade that China lost (in the United States), Mexico would have grown a little more than one percentage point,” he said.

Leaving aside the geopolitical recommendation and the health emergency, the United States sees China as an “uncomfortable” element and is interested in strengthening its own market, said Carrillo del Imco.

Reconfiguration

One of the advantages that China has is that it is the only country with control over the entire supply chain -basic inputs, intermediate goods and final products-. In addition, since before the pandemic, they have been buying mining concessions around the world, covering the production of basic minerals, “which makes them less dependent on global supply chains,” said Ávila, from the SHCP.

The companies are not going to leave China, because they are not going to stop serving the Asian giant, India or the other countries in the region.

However, to supply the US and European markets, Mexico is one of the candidates to do so, but not the only one, highlighted Baker Pineda.

“They tell us: I am not going to leave China. I have neither need nor interest”, Alcántara said of the foreign ministry. “They don’t want to antagonize the second largest market. I’m not going to take anything out of China, but I’m not going to put any more either,” he added.

In this reconfiguration, pointed out the BBVA Mexico economist, trade in services will weigh more than merchandise. “That part will be more difficult to become more local,” he anticipated.

Mexico-China relationship

China was the “best friend” not only of Mexico, but of Latin America and other parts of the world during the pandemic, so “we had no choice but to play well with China,” recalled Margarita Alcántara.

Although Mexico is part of North America and, being part of the T-MEC, it has to seek the growth and strengthening of the region, it cannot neglect the commercial enhancement with the Asian giant.

However, lamented Juan Carlos Baker, “Mexico has failed to define a Chinese policy”, unlike what happens in other countries. “We cannot pretend to live in a world where there is no China, our second trading partner,” he added.

Despite seeking a balance between the relationship with the United States and China, when the time comes, Mexico will always have to bet on the relationship with its northern neighbor, the participants of the Expansion Meeting agreed.