Mexico and China have a complex relationship that has elements of both cooperation and competition. On one hand, the two countries have significantly deepened their economic and diplomatic ties since establishing relations in 1972. China is now Mexico’s second largest trading partner, while Mexico is China’s second largest trading partner in Latin America. The two sides have signed numerous agreements and established various bilateral cooperation mechanisms over the past few decades.
However, there are also elements of distrust and rivalry in the relationship. Mexico competes with China for exports to the United States market and is wary of China’s growing economic influence in Latin America. There are concerns in Mexico about its trade deficit with China as well as Chinese involvement in sensitive sectors such as infrastructure, ports, and telecommunications. Overall, while Mexico seeks to benefit from economic relations with China, it remains cautious about becoming overly dependent and tries to balance relations with other major powers like the United States.
History of Mexico-China Relations
Mexico and the People’s Republic of China established diplomatic relations on February 14, 1972. Prior to this, Mexico recognized the Republic of China government in Taiwan as the legitimate Chinese government from 1949 until the early 1970s. Mexico was the first Latin American country to recognize the People’s Republic of China as the sole legitimate government of China.
In the initial years after establishing relations, interactions were minimal as the two countries had little in common politically or economically. China was isolated under Mao Zedong’s rule while Mexico was focused inward with its import-substitution industrialization economic model. Exchanges began increasing after China’s reform and opening up period started under Deng Xiaoping in the 1980s.
A major milestone came in 1990 when Chinese leader Yang Shangkun made the first visit by a Chinese head of state to Mexico, followed by Mexican President Carlos Salinas de Gortari’s reciprocal visit to China in 1993. These high-level exchanges put bilateral relations on an upward trajectory. In the ensuring decades, successive leaders from both sides continued to boost political, economic and cultural ties.
Current State of Economic Relations
Economic relations form a key pillar of the Mexico-China relationship today. China is currently Mexico’s second largest trading partner after the United States, while Mexico is China’s second largest trading partner in Latin America after Brazil.
Two-way trade has expanded rapidly, rising from just $1.5 billion in 1995 to over $100 billion in 2021. Chinese exports to Mexico consist largely of manufactured products such as electronics, machinery and other industrial items. Mexico’s exports to China include minerals, oil, agricultural products and manufactured goods.
However, the trade relationship is highly imbalanced in China’s favor. In 2021, Mexico exported around $10.2 billion worth of goods to China while importing $102.6 billion. This created a trade deficit for Mexico of over $92 billion, which has become a major source of concern.
Nonetheless, leaders from both sides see economic linkages as mutually beneficial overall. Chinese investment in Mexico has also grown, totaling over $600 million between 1999 and 2020. Key sectors include automotive, electronics, energy and infrastructure. Major Chinese firms like Huawei and Lenovo have a presence in Mexico aimed at accessing the US market.
To boost trade and investment, Mexico and China have held various bilateral mechanisms over the past 15 years like the Binational Commission, Strategic Dialogues, and High-Level Group. A number of agreements have aimed to strengthen financial, aviation, economic and cultural ties.
Diplomatic and Political Ties
In diplomatic terms, Mexico and China describe each other as having a “comprehensive strategic partnership”, a high level of bilateral relations. Both sides exchange frequent high-level visits and consult closely on global issues. Mexico has supported China’s positions on issues like Taiwan and Tibet. China, for its part, backs Mexico’s membership in international groupings like APEC and the OECD.
Politically, however, the relationship has been more complex due to differences in political systems and ideologies. As a democracy, Mexico encourages liberal democratic values and criticizes authoritarian practices. This has led to tensions with China over issues like human rights.
Mexico also remains aligned with the United States due to strong economic, security and people-to-people ties. This limits Mexico’s ability to act counter to Washington’s policies toward China. Despite increasing economic interactions with China, Mexico still ranks its relationship with the US as strategically more important.
There is also wariness in Mexico about China’s growing presence in Latin America and potential for economic coercion. Nonetheless, Mexico continues to pursue pragmatic cooperation with China in areas of shared interest rather than outright confrontation.
Security Cooperation
Security ties between Mexico and China are relatively limited and underdeveloped compared to economic links. There are no major defense partnerships or arms sales. However, some mechanisms do exist for law enforcement cooperation.
The two countries established the Bilateral Group on Transnational Organized Crime in 2009 to collaborate on issues like drug trafficking, money laundering, cybercrime and repatriation of illegal immigrants. Meetings are held annually to discuss strengthening information exchange and training. However, critics argue that bilateral security cooperation remains largely symbolic rather than substantive.
Mexico also maintains an extradition treaty with China since 2012. The two sides have cooperated on deporting fugitives and suspected criminals through this mechanism. However, few extraditions have actually taken place so far and Mexico has rejected some Chinese requests over human rights concerns in China.
Overall, security ties are not a significant part of Mexico-China relations. Mexico prefers maintaining strong security linkages with the US through various bilateral and regional mechanisms. China also has minimal presence in the region on security issues.
China’s Growing Footprint in Latin America
An important backdrop shaping Mexico’s approach to China is the latter’s expanding influence in Latin America over the past two decades. China has become the top trading partner for major economies like Brazil, Chile, and Peru. Chinese investment and lending in sectors like infrastructure, energy and mining has also increased exponentially since the 2000s.
Mexico watches China’s deepening ties in the region with a mix of opportunities and challenges. On one hand, China’s demand for commodities benefited Latin American economies. Chinese firms are developing key infrastructure in the region often where other funding is not available.
However, there is concern in Mexico about the economic and political leverage China is gaining. Its loans and investment increasingly shape decision-making of recipients. There are worries about excessive dependence on China trade in countries like Brazil. Mexico also competes with China for access to the US market and investors.
As the largest economy in Latin America, Mexico sees itself as a natural leader in the region. Hence it is cautious about China’s growing presence in what it considers its traditional sphere of influence. This shapes Mexico’s strategic balancing act of engaging China while hedging against over-dependence.
US Factor in Mexico’s Approach to China
The United States remains the most important foreign relationship for Mexico shaping its foreign policy choices. This contextualizes Mexico’s nuanced balancing act between deepening economic ties with China while remaining strategically aligned with the US.
After establishing ties with China, Mexico was careful to recognize Beijing’s One China Policy and cut links with Taiwan. This avoided jeopardizing relations with the US which also recognized Beijing after 1979. Mexico also joined US-led sanctions against China after the Tiananmen Square incident in 1989.
Currently, Mexico tries to avoid directly confronting China on issues like human rights where the US takes a hardline stance. For example, Mexico did not join Western countries diplomatically boycotting the 2022 Beijing Olympics. However, neither has it embraced China to America’s detriment.
Despite increasing trade with China, Mexico is tightly integrated with the US economy through NAFTA/USMCA and strong cross-border supply chains. The US remains the major source of Mexico’s FDI, technology, and security partnership. Geography also binds the two neighbors. This enduring economic and strategic reliance on the US shapes Mexico’s caution in embracing China.
Mexico treads a fine line between expanding commercial ties with China and avoiding policies that could be seen as too favorable by Washington. Its balancing act reflects how US-China rivalry presents both opportunities and challenges for countries across different regions.
Areas of Concern and Friction
Despite growing cooperation, the Mexico-China relationship also faces areas of concern, misgivings and mistrust on both sides.
A major Mexican concern is its large trade deficit with China. Mexico’s economy relies heavily on exports but Chinese products have flooded its market creating a skewed trade balance. For example, Mexico’s $92 billion trade deficit with China in 2021 was equivalent to 4% of its GDP.
There are worries this dependence on Chinese imports could be used as leverage against Mexico. Similarly, the country has invited substantial Chinese investment in sectors like energy and infrastructure but remains cautious about becoming overreliant. Restricting certain sectors for national security reasons has created tensions with Beijing in the past.
Another concern in Mexico is illegal Chinese migration and human trafficking networks illegally bringing Chinese nationals into Mexico and towards the US border. China is also seen as not doing enough to curb the synthetic drug fentanyl’s flow into Mexico and US.
At the same time, China has its own concerns about Mexico’s relations with Taiwan. Mexico continues engaging Taiwan commercially and diplomatically despite recognizing Beijing. For example, Mexico keeps trade and tourism offices in Taipei. China also urges more cooperation from Mexico on deporting criminal suspects.
Overall, while both countries benefit from economic ties, underlying suspicions driven by competition and lack of strategic trust persist. Managing these concerns while deepening cooperation remains an ongoing process.
Impact of US-China Rivalry
Intensifying rivalry between the United States and China has significanխt implications for Mexico given its proximity and close ties to the US. As US-China tensions have increased over trade, technology, security and political issues in recent years, Mexico feels pressure from contradictory forces.
On one hand, Mexico has benefitted economically from the US-China trade war and supply chain diversification away from China. It has attracted manufacturing investments from firms leaving China. US pressure on allies to exclude Chinese firms like Huawei has also given Mexico opportunities in 5G connectivity and telecom.
However, deteriorating relations between its two biggest trading partners also create challenges. Growing calls in the US to decouple from China economically could hurt Mexico’s exports. The US also expects allies like Mexico to side with it on issues like Taiwan, creating diplomatic pressures. Unstable US-China ties slow down global growth and demand.
Mexico has responded by largely aligning with US restrictions against China on issues like Huawei’s 5G infrastructure while trying to retain pragmatic economic ties with Beijing. It seeks to balance opportunities from the US-China rivalry against potential disruptions to its own economic priorities and regional stability. But walking this tightrope is likely to become increasingly difficult if US-China tensions escalate further.
Public Opinion Views on China
According to Pew Research Center surveys, Mexican public opinion toward China is more unfavorable compared to other Latin American countries. In 2019, around 65% of Mexicans had an unfavorable view of China, up from 44% in 2010. Only 35% had a favorable opinion compared to 55% in 2010.
This negative shift is attributed to growing concerns about China’s economic impact. A 2020 Mexican think tank survey found 70% identifying China as the greatest threat to Mexico’s economy and jobs. Around 87% saw US-China tensions as detrimental to Mexican interests.
However, Chinese cultural influence through growing popularity of Chinese restaurants, martial arts, medicines, and celebrations like Lunar New Year is viewed more positively by the Mexican public. Exchanges of students and tourists have also increased mutual understanding.
On political and human rights issues though, the Mexican public remains critical of China’s authoritarian system. News about oppression of minorities like Uyghur Muslims and the democracy movement in Hong Kong shapes views. But most still prioritize Mexico’s economic ties with China.
Overall, while public perceptions of China have deteriorated, pragmatic economic interests dominate for both public and leaders rather outright hostility. Tensions exist but are balanced by shared interests.
Conclusion
In conclusion, while Mexico and China have built robust economic and diplomatic ties, their relationship stops short of a full strategic alliance. Cautious pragmatism and selective cooperation in areas of shared benefit drive the relationship rather than political or ideological alignment. China’s expanding influence and Mexico’s close relations with the US prevent a deeper convergence of interests beyond economic ties. Both retain mutual suspicions and their own competing agendas. However, worsening US-China tensions will challenge Mexico’s balancing act going forward. Managing converging interests while mitigating competitive pressures and risks remains imperative for Mexico’s foreign policy towards China.
