OAN Roy Francis
UPDATED 2:18 PM – Thursday, April 27, 2023
Over the last decade, China has excessively raised its foreign investment in Mexico which has prompted experts to express concerns over the financial and political gains that Beijing is receiving.
According to Eric Farnsworth, vice president of the Americas Society and the Council of the Americas, China is increasing its investments in Mexico due to the increasing opportunities that it sees there.
“China increasingly sees opportunity in Mexico,” he told Fox News. “And the investments are increasing.”
Farnsworth went on to explain that the increase in Chinese investments in Mexico are due to Beijing’s attempts to maneuver around the United States’ sanctions against China, and the rising tensions between Beijing and Washington.
China’s foreign direct investment (FDI) had reached an all time high in 2021 despite the sanctions that Washington has placed on Beijing.
Despite the trade war between the U.S. and China, the U.S. still remains China’s biggest exporter. It is only surpassed by the Association of Southeast Asian Nations (ASEAN) which is made up of 11 nations, and the European Union with is comprised of 27 countries.
“It’s convenient to try to circumvent sanctions … by going to Mexico and then producing in Mexico and then trying to get into the U.S. market,” Farnsworth said.
China reportedly does not want to lose on the huge U.S. market, therefore they have invested and set up companies in Mexico where they are able to skirt U.S. restrictions by making their product in Mexico and putting the “Made in Mexico” label on them.
The strategy, which is known as “nearshoring” in Mexico, is a strategy that countries like Japan have been utilizing for years. Japan has been producing top commodities, like automobiles, in Mexico due to the close proximity and the ability to quickly ship them across the border.
China is also investing in the future of Lithium, also known as “white gold” due to its extremely high global demand. Mexico is one of the world’s top Lithium-rich countries. While Mexican President Andres Manuel Lopez Obrador has been pushing for his nation to nationalize Lithium, no agency in Mexico exists that can mine and extract the resource yet. The lone Lithium mine that is close to extracting the resource in Mexico is operated by a Chinese firm.
According to Reuters, it remains unclear if the country is aiming to seize the Lithium mine in its push to nationalize the resource.
Other investments that China has made in Mexico include telecommunication systems, digital infrastructure, energy and other natural resources. Similar investments have been made in other parts of South America as well.
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