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New reports have revealed that Chinese firms have invested a staggering $14 billion in Mexico over the past two decades, with 42 percent of this investment occurring in 2019 and 2020.

In an analysis from the Academic Network of Latin America and the Caribbean, Chinese companies have put $5.81 billion of capital into Mexico in the last two years alone. This injection of cash reportedly created more than 62,000 jobs in the same time period.

“The recent signing of the United States-Mexico-Canada Agreement (USMCA), as well as the trade conflicts with the United States and the low cost of labor in Mexico, even compared to China itself, make companies bet on this country in key sectors like the production of televisions and technology, as well as automotive supplies targeted to the main destination of these companies,” said Mario Hernández of accounting firm KPMG.

For his part, director of industrial real estate at Newmark Abraham Fernández said he believes Chinese companies will only accelerate their investments in Mexico over the next few years, with an expected increase to take place from 2021 to 2025.

At the same time, Mexico managed to retake its spot as the Number One trade partner of the United States away from China during the first two months of 2021, representing 14.9 percent of its northern neighbor’s total foreign trade.

“Factors such as geographic proximity and specialization that Mexico has managed to accumulate in recent years make it an attractive partner now that the United States begins to seek commercial independence from China,” said Edmundo Montaño of Drip Capital Mexico.

With the increase in business with both China and the United States, Mexico seems to be in a good economic position during its present recovery time following covid-19 largely shutting the country’s economy down in 2020.

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