Mexico is tipped to be an Economic superpower

[Brainsucker]

I always wondered why don't US businesses just use cheap labor in Mexico and save on shipping and time from China. Its literally next door.

Already exporting $427 billion. They will hit $1 trillion within 20 years.

The answer is simple. Because they want to sell their wares to Chinese. And that was their initial objective when they invested in China, in early 2000.

At that time, American business had a polemic when trading with China. They couldn't sell their wares to China, just because their product was too expensive for China market. They couldn't compete. Then they found the solution, and it was by open a factory in China. So, if they produce their wares in China, with China cost, they could sell their wares in China with a more competitive price.

But then, because the production cost in China was so cheap, those American business could export their product from China to all over the world. Including selling their products back to United States.

It is the same as today. Why they choose to move their production facilities to Vietnam, and not Mexico. Simply because it is China market that they aim. Basically Vietnam is China's Mexico. Plus, by opening a factory in Vietnam, the material cost, that mainly come from China also won't be raised exponentially because of the range.

One of my friend is a Daikin (Japanese Air Conditioner company) agent in my town. When he went to China, he was invited to Daikin factory in China. And he was surprised, because the factory was so big. Even the Japanese Engineers came to China, to work in that factory.

Then he asked to Daikin boss, if he has any plan to open a Daikin factory in Indonesia. And the boss was answered, no. Simply because the sales in South East Asia was not enough for them to open a factory. The sales in China beat the sales of several countries, so they chose to open a factory in China, instead of stay in Japan, or open a factory in Indonesia.

By opening a business in China, they can cut the transport cost, material cost, etc, so their Air conditioner can stay competitive in China market.

I think the same reason can be applied to India today. And that's why several China's business also open their production in India. The reason is just the same as China. The market in India is very big, so they choose to open a factory in India, in order to cut cost.

 

[Novus ordu seclorum]

About 40% of Mexico's FDI [$100b in 2019] comes from America. Without America, Mexico would be like Bolivia.

 

[tower9]

Mexico will never be a superpower, that’s ridiculous. It is a major emerging economy though.

 

[Get Ya Wig Split]

@F-22Raptor @Hamartia Antidote Golden opportunity for everyone involved. Based on current projections, Mexico’s population will peak at the end of 2062 at 157.2 million people. I think It's time to cut off all trade with China.