Jump to content
Chapala.com Webboard

Think twice Mexico about getting too cozy with the Chinese


Mainecoons

Recommended Posts

Several years ago I went to a function in Ajijic where Diana Kennedy, one of the leading experts on Mexican cuisine, spoke about the importation of chili peppers into Mexico from China and the danger it posed to domestic production.

Here's an interesting article about the Chile de Arbol which is the leading pepper grown in Jalisco.  

http://www.freshplaza.com/article/168544/Mexico-and-China-in-dispute-over-the-chile-de-arbol

Link to comment
Share on other sites

Mexico may be playing its cards this way because Nafta will be renegotiated and the darn wall isn't off the agenda. Just food for thought. We live in a global economy and It is pretty clear to the rest of the world that the USA can't be trusted anymore to keep its word or agreements except if you are Saudi Arabia

Link to comment
Share on other sites

What a lot of baloney - The U.S.A. like it or not, has decided to become an isolated island,  and not the world's policeman anymore.  That's fair enough - maybe well overdue - your vote, your country, your future. The Chinese, India, and the Germans are the new "globalists", they are glad to take up the tiller. That China can export a chile raw material, and then Mexican locals make it into a value added product, is exactly what globalism is all about. And the quality of Chinese made manufactured goods is improving everyday, and yet the prices are quite extraordinary (although it can take two months with a usually free postal shipment). Sites like DHhgate.com, Alibibaba, will not pay vendors until the goods are approved by the buyer - try that with Amazon or Ebay.

China is not "looting" the Mexican economy, they are providing endless opportunities for skilled, and semi skilled entrepreneurs. Maybe Mexicans just want a sturdy socket wrench set that works, without the golden label of "Snapon" or "Craftsman".

Link to comment
Share on other sites

And maybe they should be making those tools here with Mexican labor and Mexican profits.  A country doesn't prosper from buying things they can make as well or better themselves.  

I'm not surprised you don't understand how huge balance of trade deficits and loss of jobs drains a country or how China is the most mercantilist nation on the planet.

Others do:

https://www.theguardian.com/world/2013/mar/26/china-latin-america-resources-concern

Quote

The lopsided nature of China-Latin America trade is also questioned because while it is good in terms of GDP quantity, it has not been so beneficial in developmental quality. Commodity suppliers are delighted at the Chinese demand for their exports, but manufacturers complain of a flood of cheap Chinese imports that undermine their competitiveness.

The Brazilian president, Dilma Rousseff, wants to change the nature of her country's relationship with China by putting more emphasis on science, technological and educational co-operation as well as soy, iron and oil. This follows signs that Brazil's recent economic growth masks a de-industrialising trend as primary producers account for a rising share of GDP.

Mexico, which has fewer commodities to sell but a big domestic market, has made some of the sharpest criticisms of the trend, albeit in private.

"We do not want to be China's next Africa," Neil Dávila, head of ProMéxico, a foreign trade and investment promotion agency, was quoted as saying in a diplomatic cable released by WikiLeaks. "We need to be owners of our own development."

Bottom line is Mexico's bread is buttered NOB, not in China.  Mexico enjoys a trade surplus with the U.S. that when everything is included, approaches 200 billion U.S.  Already it is running a significant trade deficit with China approaching 60 billion U.S.

Trade with China results in a net loss of wealth to Mexico and indeed pretty much with every nation that "trades" with China.  Remittances from the U.S. alone represent 24% of Mexican GDP.

China will take the bread and eat the butter.  Learn from America's mistakes which they are now trying to correct, not very skillfully unfortunately.

https://www.thebalance.com/u-s-china-trade-deficit-causes-effects-and-solutions-3306277

 

Link to comment
Share on other sites

San Luis Potosi still has that Ford monument; a huge steel framework for a new Ford manufacturing plant, which was abandoned early this year, to the cheers of some in the USA, who were sure that Ford would be keeping those jobs in the USA and making their smaller cars domestically.

Well, that euphoria did not last long.  Yesterday‘s news announced that Ford will now build the Ford Focus in China, for export to the USA, at even greater savings than building it in Mexico.

I see a trend.

Link to comment
Share on other sites

3 hours ago, Mainecoons said:

 

I'm not surprised you don't understand how huge balance of trade deficits and loss of jobs drains a country or how China is the most mercantilist nation on the planet.

I'm sorry, you are completely off the mark on this one. I have studied Chinese history, politics, and Chinese literature at a university level, I have a degree in Economics, Magna cum laude International Politics. I have visited China many times. I have a great many Chinese contacts. According to you, you spent your working career studying what happens to a piece of toilet paper after it is flushed. Rest my case.

China is becoming the centre of a new world order - get used to it, or start WW3.

ps- what happened to the Mexico is Hell post? Boys upstairs ask you to take it down?

Link to comment
Share on other sites

I may be wrong, but I am under the impression that the Ford Focus is designed mainly for the overseas market. It is equipped with a 4 cylinder engine which is pretty much the norm overseas. Also TESLA is gearing up to built their first overseas assembly plant in China. The cars assembled in this new factory are from my understanding for the Chinese's market (wish I could buy a model 3.....)

Link to comment
Share on other sites

35 minutes ago, CHILLIN said:

I'm sorry, you are completely off the mark on this one. I have studied Chinese history, politics, and Chinese literature at a university level, I have a degree in Economics, Magna cum laude International Politics. I have visited China many times. I have a great many Chinese contacts. According to you, you spent your working career studying what happens to a piece of toilet paper after it is flushed. Rest my case.

China is becoming the centre of a new world order - get used to it, or start WW3.

ps- what happened to the Mexico is Hell post? Boys upstairs ask you to take it down?

That's great.  I'm very impressed.  However your case is touting your alleged superior  credentials followed with the all too usual from you personal insult.

Such a smart guy having to resort to this:

Quote
From Wikipedia, the free encyclopedia
 
 

An argument from authority, also called an appeal to authority, popularized by John Locke as the argumentum ad verecundiam[note 1], is a form of argument in which expert opinion supports the argument's conclusion. It is well known as a fallacy, though it is most often used in a cogent form.[4]

Now would you care to make your case?  

Link to comment
Share on other sites

Why trade deficits matter.  This is written around the U.S. but is equally applicable here IMO:

https://www.theatlantic.com/business/archive/2016/12/trump-trade-deficit/509912/

As noted trade deficits aren't necessarily bad if the country having the deficit has very strong growth.  Mexico's growth is only a few percent, hardly fitting that definition.

What happens when there is strong growth is this:

Quote

To start, it’s not inherently a problem for a country to have a trade deficit. For example, a fast-growing economy pulls in more imports as it expands, which pushes a country’s international trade account toward deficit. In that context a trade deficit is good for the economy, allowing the country to consume and invest more than if it maintained balanced trade. This was the story in 2000 when, after four years of strong growth, the American economy had an unemployment rate of 4 percent and a trade deficit that amounted to 3.7 percent of GDP.

However, when growth is anemic, you get this:

Quote

In this context, the trade deficit was subtracting from demand in the domestic economy. Spending that could have employed people who needed jobs in the U.S. was instead employing people in Germany, China, and other countries from which America imports goods and services.

For the people who have money to spend, cheap goods are great.  However for people to have money to spend, profits along with jobs need to stay at home.  Or offsetting profits need to be earned to compensate for the outflow.

And of course The Economist also know nothing about this topic:

http://www.economist.com/node/14660438

Quote

Many foreign firms, of course, are doing well in China, especially at the two extremes of the value chain: things like luxury goods, fibre-optic cable and big aeroplanes on the one hand, and oil, ores and recyclable waste on the other. But in between, both explicit legal impediments and hidden obstacles continue to hamper access to Chinese customers, despite China's promises of reform when it joined the World Trade Organisation (WTO) in 2001. Publishing, telecommunications, oil exploration, marketing, pharmaceuticals, banking and insurance all remain either fiercely protected or off-limits to foreigners altogether. Corruption, protectionism and red tape hamper foreigners in all fields.

Recent reports from three lobbies for foreign businesses, the American Chamber of Commerce in Shanghai, the European Chamber of Commerce in China and the US-China Business Council, bear out this gloomy view. Their biggest gripes have nothing to do with typical business concerns, such as the availability of good staff or high costs. Instead, they complain about subsidised competition, restricted access, conflicting regulations, a lack of protection for intellectual property and opaque and arbitrary bureaucracy.

 

Link to comment
Share on other sites

I would never get in this debate. All I know is that if my $600 US (average price) iPhone 6+ were assembled constructed and made in the US it would have cost twice as much. Trouble is, I don't know where it was made. It's just that it was not made in the US. And I am a cheap A**.

Link to comment
Share on other sites

34 minutes ago, johanson said:

I would never get in this debate. All I know is that if my $600 US (average price) iPhone 6+ were assembled constructed and made in the US it would have cost twice as much. Trouble is, I don't know where it was made. It's just that it was not made in the US. And I am a cheap A**.

The list is long. Quite informative. 

https://www.quora.com/Where-is-the-iPhone-originally-made

 

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

×
×
  • Create New...