Chinese Investment in Manufacturing on the Rise in Mexico

Chinese investment in Mexico continues to grow as more companies from the world’s most populous nation seek to take advantage of the country’s proximity to the United States and its free trade agreement with its northern neighbor.

The investment from the world’s second largest economy looks set to increase the number of Chinese firms relocate to take advantage of tariff-free trade with the U.S. and Mexico’s proximity to their main export market. Investment from China (including Hong Kong) reached a record high of almost $500 million last year, according to the Economy Ministry, up from just under $300 million in 2020 and just over $200 million in 2019.

Nuevo León is one state particularly intent on attracting Chinese investment. State Economy Minister Iván Rivas told Bloomberg that Nuevo León is building two “superhighways” to Mexico’s border with the United States. The state also offers tax incentives to companies that meet certain requirements.

Rivas said that Mexico’s proximity to the United States “gives us a great competitive advantage,” while Gómez, the Guanajuato economic development minister, said that logistics and the trade pact with the United States and Canada makes Mexico an attractive destination for Chinese investment. Among the benefits of the investment for Mexico is job growth, with Chinese companies hiring locals to fill most positions.