China and Mexico Ahead


Luis Rubio

The 2008 crisis was a watershed for China. Up to then, the great Asian nation underwent an accelerated transition from the socialism of Mao Tse-tung toward the liberalization headed by    Deng Xiaoping, which yielded more than thirty years of annual growth rates of more than 10%. The expectation for the West was that, sooner or later, China would converge with the rest of the world not only in economic development, but also in political opening. Independently of the internal political dynamics, what appears clear today is that in 2008 a new path was defined inside China, one much less opening-oriented economically, more authoritarian politically, and much more assertive in the international arena.

The direction that China is adopting goes hand in hand very well with the retraction of the U.S. on the international arena, which furnishes a scenario of enormous transcendence for Mexico. During past decades, China, emerging power that operates with absolute geopolitical determination, has avoided Mexico; while there have been some industrial installations (the majority assembly plants) and at least two infrastructure projects, both failed ones, the Chinese presence in Mexico is minimal, above all when compared with that in other countries in the South of the continent or in Africa. China has always recognized the geographic location and economic links that characterize Mexico, the reason for which it has maintained itself relatively to one side.

Two circumstances have altered this: on the one hand, the new U.S. tone under the Trump administration has re-opened discussion within Mexico concerning the elevated concentration of economic ties with the U.S.  In addition to this, there are protectionist undertakings such as that relative to steel but, in the main, the permanent threat to cancel NAFTA demands a review of Mexico’s national priorities. Although I have no doubt that the logic of industrial integration will continue to dominate entrepreneurial decisions and that this, in turn, will persist as the principal growth engine of the economy in general, we Mexicans should review the constellation of possibilities with a view toward the future.

On its part, the new Chinese assertiveness follows an implacable rationality: take advantage of the weakness of the U.S. in order to establish new geopolitical realities. If one observes the manner in which artificial islands have been constructed throughout the South China Sea, to the degree of formalizing them as a new province, China’s way of acting leaves no doubt with respect to the clarity of vision, and the continuity of same, which is reinforced with the new internal tonic of a new “permanent” unipersonal leadership. The decision of Xi Jinping to circumvent regular elections says everything about his objectives both political and international: while it entails the evident complexity of the succession (that tends to be the weak link because it exhibits a tendency to be unpredictable, like what happened to Mubarak in Egypt and now to Putin in Russia), it permits a continuity of command and of vision that no other country can achieve.

Mexico has had a long relationship with China: from the establishment of diplomatic ties in 1972, the political relationship has been profound, albeit not so the economic one. Certainly, Mexico imports merchandise in the dozens of billions of dollars from that nation (in addition to others via the contraband route), but it exports relatively little. The same is true of the capital balance:  several Mexican enterprises have a presence in the Asian giant and there are Chinese companies in Mexico but the aggregate is relatively modest.

Over the last year, Mexico has been reviewing its international relations, part by design and part due to the way things have come to pass. The greatest surprise comes not from China, but rather from Brazil, a nation that for decades has regarded Mexico with suspicion and as a competitor; however, in recent times, Brazil has sought to intensify its economic and political bonds.  While the two nations -Brazil and Mexico- have assumed radically distinct strategies over the past decades -Brazil entertains a strong protectionist bias, Mexico has embarked on a marked liberalizing approach- the rationality of carrying out more exchanges and developing greater cooperation in the political realm is evident.

The question is what is possible and desirable with China. On the one hand, Mexico is firmly anchored in the North American region –especially through the industrial supply chains, but also in strategic political logic- and that establishes an outright limit to any exchange, in addition to obligating a triangular conception –Mexico, the U.S. and China- in the relationship. On the other hand, within this framework, there are many opportunities to deepen the relationship and develop novel ways of interacting, in political as well as economic spheres.

What plainly makes no sense in terms of reality is the notion of there being a “Chinese playing card” in the relation with the U.S. China would never accept being a bargaining chip, but its thrust as a major world power obliges Mexico to define its own priorities and establish frameworks of possibility in the relationship with the U.S. as well as with China. There is no way out of this triangle, but there is one of progressively amplifying it.