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New Mexico-China deals will boost investment and trade

Thursday, January 15, 2015

Subject

Mexico-China trade and investment links.

Significance

President Enrique Pena Nieto and President Xi Jinping have met four times in less than two years, not counting multilateral summits -- of which the most recent was the January 8-9 summit with the Community of Latin American and Caribbean States (CELAC) in Beijing. Last November, also in Beijing, both governments signed wide-ranging agreements during a meeting on the sidelines of the APEC summit. After a decade of difficult bilateral relations stemming from Mexico's enormous trade deficit with China, Mexico is keen to increase investment ties. Nonetheless, the recent cancellation of a contract won by a Chinese company to build a high-speed train in Mexico cast a shadow over the visit. The misstep points to broader governance challenges as Mexico courts Chinese investors and implements wide-ranging economic reforms at home.

Impacts

  • New cultural exchanges will manifest the intention of both countries to reorient bilateral relations to emphasise cooperation.
  • The recent Mexico-China deals are likely to trigger a reaction on the part of the United States to reinforce its ties with Mexico.
  • The Mexico-OECD deal which will guide the new tender for the train project may mark a departure point in Mexico's anti-corruption fight.
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