China pauses investments in Mexico and looks toward Peru

Photo: MINCETUR Perú Flickr.

According to a report by El Financiero, due to the tariffs imposed by the U.S. government and Mexico’s interest in maintaining its trade relationship with that country, the People’s Republic of China has decided to halt its investments in Mexico.  

In this context, a project planned for this year—the construction of an automobile manufacturing plant by the Chinese company BYD—was suspended following Donald Trump’s arrival at the White House. The plant, which was expected to create 10,000 jobs and involve an investment of approximately $600 million, was put on hold due to trade tensions between the United States and the People’s Republic of China, as well as the new tariffs imposed on automobiles.  

As a result, relations between China and Mexico have been affected, and both nations have distanced themselves commercially from one another. Regarding this matter, Jalisco’s Secretary of Economic Development, Cindy Blanco, stated that they are aware of the possible implications arising from the construction of this plant in Guadalajara, Jalisco, and that, for this reason, they are seeking an agenda aligned with that of the United States.  

In light of this, the People’s Republic of China has demonstrated its growing detachment from Mexico whenever the latter strengthens its ties with the United States. For this reason, and out of concern that BYD’s plant technology could be leaked to the U.S., the Asian country chose to halt its construction.  

In contrast, it is worth recalling that during Donald Trump’s first term, due to the tariffs imposed on Chinese imports, the Asian country decided to invest in Mexico to offset potential losses and encouraged its companies to begin operations in Mexican territory.  

On this matter, Laura Acacio, manager of Jiangyin Hongmeng Rubber Plastic Product, stated that “This entire geopolitical chess game has affected Chinese companies’ willingness to invest in Mexico.” She also mentioned that this company, which specializes in medical supplies, will seek to expand into the Peruvian market due to the new port connecting to Shanghai and because the government of this South American country is more receptive than Mexico’s.  

It is worth noting that investments from companies of the People’s Republic of China in Mexico have exceeded $2 billion annually since 2022, according to information from the Latin American and Caribbean Academic Network on China. This figure represents a significant increase compared to a decade ago, as the current amount is twice that of ten years ago.  

A large portion of this investment was directed toward the Hofusan industrial park, which is an estate located 190 kilometers from the U.S. border. In this park, at least 40 companies have commercial ties with the People’s Republic of China, including Kuka Home, a furniture manufacturer, and Hisense, a company focused on electronics and auto parts manufacturing.

Main Source:

China ‘congela’ inversiones en México… y mira hacia Perú: ‘Es más receptivo que el gobierno mexicano’ – El Financiero

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