This document summarizes the trade and foreign direct investment relationship between China and Mexico. It outlines their long historical and cultural connections dating back to the 15th century. Bilateral trade has increased rapidly since diplomatic relations were established in 1972, growing from $12.9 million to $34.74 billion in 2009 making China Mexico's second largest trading partner. While Mexico exports have increased year-over-year, China runs a large trade surplus with Mexico of $30.31 billion in 2009. Chinese FDI in Mexico has also increased, with major investments in manufacturing facilities. The document also discusses some challenges in the trade relationship including China's large trade surplus and issues around currency valuation.
1. Trade & FDI in China
Xibiao Xian
xxb@uibe.edu.cn
2. • Outline
– Relationship between the 2 Countries
– Trade history
– Fast growth of international trade
– Trade issues China is facing
• Trade surplus & large foreign reserves
• Anti-dumping cases
• RMB appreciation
– FDI
• Inflow & outflow
• New policies
3.
4.
5. • Relations
– Feb. 14, 1972, diplomatic relationship
– 5th century, a monk went to Mexico
– 16th century, Chinese ships with silk, china to
port city Acapulco; brought back corn
– Mexican silver coins
• 1910, 1.1 billion foreign silver coins in circulation;
1/3 were Mexican
6.
7. • In 1875, first group of the Chinese brought
to Mexico to build the railroad; by 1930,
40,000 Chinese people lived in Mexico
• Dec. 2003, establishment of Strategic
Partnership
• Visits of leaders
– All presidents exchanged visits
– Foreign Ministers to boost bilateral
cooperation in economy
8. • Trade relations
– 1972: $12.9 million
– 1991: $ 235 million
– 2000 $ 1,823 million
– 2005 $ 7,760 m ($18,764 million by Mexican)
9. – 2009: $34.74 billion(16.18), decreasing by
5.6% (7.8%)
• Mexico’s export to China: $2.22 billion (3.88)
increasing by 8.2% (5.2%), 1% of total export with
an increase of 0.3%
• Import from China: $32.53 billion (12.3),
decreasing by 6.4% (11.3%), accounting for 13.9%
of total import, rising by 2.6%
• Trade deficit: $30.31 billion (8.42), decreasing by
7.3%; the largest source country of trade deficit
• 7th export destination; 2nd import source country
(figures in () are statistics from China’s Customs)
10. • Jan—May, 2010
– Trade in goods reached $17.25 billion,
increasing by 39.8%
– Exports to China: $1.42 billion, rising by
64.1%, accounting for 1.2% of total value of
exports
– Imports from China: $15.83 billion, rising by
38%, accounting for 13.7% of total imports
– Trade deficit: $14.42 billion, increasing by
35.9%. The Largest source of trade deficits.
– China the 5th export destination and 2nd
import source country
11. • Investment in Mexico
– Golden Dragon Precise Copper Tube Group
invested $210 million in Coahuila State ,
largest investment from China
• Oct 28, 2009, opening ceremony, Governor
attended
– China's Foton Automobile Co. plans to
produce light trucks in the state of Veracruz
– Lenovo plans to produce laptops in Mexico,
its largest investment outside of China
12. • Investment in China
– Bimbo entered China in 2005
– Acquired Spanish Panrico in Beijing with € 9
million
– Biggest investment outside America & Europe
– Biggest investment by Latin American
countries in China
13. – It had 48 products at the beginning, but later
reduced to 43
– They found the Chinese didn’t like the taste of
cinnamon in the bread; they took it out and
add dried meat, raisins, red beans…
– They have products for different groups, low-
income, high-income, youngsters, aged
people, diabetics
– They rely on supermarkets and each time
they deliver new products and take away the
unsold even they are not expired
14. – Comments from the Tec students
• ―The first days I went to the supermarket and I
bought some of Bimbo’s products, I think that was
the same product as in México but when I tasted
them, it was not the same. Inside of the cake there
was something that until today I don’t know what it
was.‖
• ―One product that caught my attention was a
pancake filled with sweet beans. In Mexico, I have
never seen anything like that; it is clear that this is
due to the large difference between the two
cultures, Mexican and Chinese, yet this particular
product caught my attention.‖
15.
16.
17. • Cooperation in science & technology
– Agriculture, fishing, mining, petro-chemistry,
communications, rural development, social
sciences, Chinese medicine
18. • Trade in China
• Long history
– Silk Road
• 206 BC to AD 220
– Sea Silk Road
• Tang, Song, Yuan, Ming Dynasties (618—1644)
– Tea Road
• Mid-1500s till 1900s
19. • Excavation of a Song ship in Dec. 2007
– Archeologists excavated a sunk ship of the
Song Dynasty (960—1279) in the South
China Sea
– The Nanhai One
• 26 m long and 10 m wide
• Loading capacity: 800 t
– The Crystal Museum being built to hold the
ship
• Opened on Dec. 25, 2009 in Yangjiang,
Guangdong
35. – Surplus
• Processing trade
• Restrictions on goods to China
– Foreign reserves
• Worries about losing value
– RMB value
• Imbalance caused by globalization
– Antidumping
• From Jan to Aug. 2009, 17 countries launched 79
special safeguard investigations against Chinese
exports, worth $10.035 billion
• WTO: countries launched 437 anti-dumping
investigations, 2.1 times higher than that in 2008
36. • FDI
– Till July, 700,000 projects by foreign
companies. FDI inflow $1050 billion
– Till 2009, China’s total FDI outflow reached
$300 billion, 32 times more than that in 2002
– A revised ―Catalog for the Guidance of
Foreign Invested Enterprises‖ adopted on Dec.
1, 2007
– April 2010, State Council issued new
regulations on FDI
37. – New regulations
• Support Chinese A-share listed companies in
further introducing strategic investors from home
and abroad, and standardize foreign companies'
investment in domestic securities and corporate
merger and acquisition moves.
• Qualified foreign-funded companies are allowed to
go public, issue corporate bonds or medium-term
bills in China
• Multinationals are encouraged to set up regional
headquarters, research and development centers,
procurement hubs, financial management and
other functional offices in China
38. • Importing items for scientific and technological
development by qualified foreign-funded R&D
centers will be exempt from tariffs, importing value
added tax and goods and services tax by the end
of 2010
• Foreign-funded enterprises are also encouraged to
increase their investment in China's central and
western regions, particularly in environment
friendly and labor-intensive companies
