Business
Hidden Figures: China’s Investment in Mexico Skyrockets, Defying Official Estimates with a Potential $13 Billion at Stake
China's financial commitment in Mexico could significantly surpass official estimates, potentially reaching around US$13 billion
Researchers suggest that Chinese firms, in an effort to sidestep American tariffs, have significantly increased their investments in Mexico, a figure much higher than what is officially reported.
Chinese financial involvement in Mexico, often seen as a strategic bypass to US-enforced tariffs, might be six-fold higher than what the official statistics suggest, according to a risk advisory firm's report published on Thursday.
The Rhodium Group, located in Washington, has discovered over 700 finalized foreign direct investment deals from China to a Latin American country, totaling a value of US$13 billion. If these numbers are correct, they would surpass official records of investment stock – the overall built-up amount of direct investments.
The Rhodium Group, in its China Cross-Border Monitor report, pointed out that despite being a modest fraction of total overseas investment, the actual figure of China's FDI in Mexico is notably greater than what official data reveals.
"Some Chinese companies are considering the domestic Mexican market, but the general inclination to invest will be determined by the ease of entry into the US market."
Since 2015, China has been announcing an average of 13 significant investments per year, each year's total averaging around US$1 billion through to 2020, according to the authors of the report. It's forecasted that by 2023, automotive investments will make up about three-quarters of the total, with a significant growth contribution coming from parts manufacturers.
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