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Maximizing Opportunities in China and Mexico Trade Markets

Explore the potential of China and Mexico markets for U.S. exporters. Navigate challenges, understand trends, and leverage growth opportunities in trade relations between the U.S., China, and Mexico.

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Maximizing Opportunities in China and Mexico Trade Markets

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  1. 2005 Exports from California to World Provided by the Office of Trade and Industry Information (OTII), Manufacturing and Services, International Trade Administration, U.S. Department of Commerce. numbers are in thousands ($ USD)

  2. China’s dynamic and growing market presents tremendous opportunities for U..S exporters… but China can be a challenging market in which to do business” • Secretary Gutierrez, U.S. Department of Commerce

  3. The Other by Carlos Antonio Rovelo

  4. The Other • Do you export to • China • Mexico • Have you visited • China • Mexico • Do you speak • Mandarin or Cantonese • Spanish • DO YOU HAVE A FRIEND IN CHINA OR MEXICO

  5. U.S. buys 40 percent of China exports

  6. The Other: China 2010 China’s exports are expected to double

  7. manuFACTOR • 55 PERCENT OF GOODS PRODUCED IN CHINA ARE MADE BY U.S. MULTINATIONALS • MOST OF WHAT USED TO BE MADE SOMEWHERE ELSE IN ASIA IS NOW BEING MANUFACTURED IN CHINA

  8. The Other • The century of the Other • The difficulty to understand the Other • Ethnocentric • You cannot be an educated business person unless you are open to the Other • Listen to the Other • Individuality is alive and well in America

  9. China as a Market Share of World Consumption • Cement: 40% • Coal: 31% • Iron Ore: 30% • Steel: 27% • Aluminum: 25% • Oil: 8% and growing 30%/yr 2003 Data

  10. 2004 U.S. REGIONAL TRADE (Billions of U.S. Dollars) Canada Balance –67 Pacific 189 Atlantic 226 540 256 419 230 Balance –314 Balance – 189 Mexico 156 99 111 61 Balance – 45 South America and Caribbean Balance –38

  11. Pacific trade move primarily from dominant seaports to inland port locations Prince Rupert, CN Vancouver, CN Seattle Tacoma NY/NJ Oakland LA/Long Beach Pacific Suez To U.S. East Coast Panama Canal to Gulf and East Coast Ports

  12. Future Corridors Prince Rupert, CN Vancouver, CN Seattle Tacoma NY/NJ Oakland LA/Long Beach Pacific Suez To U.S. East Coast Manzanillo Panama Canal to Gulf and East Coast Ports New Routes Through Mexican Ports Acapulco

  13. Mexico – China Exports to the USJanuary – February 2006 • Mexican exports to the U.S. rose 8.3%, down from an increase of 12.6% in the same period last year • China’s exports to the U.S. soared 18% over the same time period

  14. China’s Electromechanical Exports January – September 2005 • $299.02 billion – a 32.9% increase • 54.7% of total value of China exports • Computer equipment and spare parts - $73.28 billion – an 27.2% increase • Household electrical appliances and electronic products - $37.9 billion – a 29.1 % increase • Communications equipment and components - $32.34 billion – an 43% increase • Electronic Components - $27.75 billion – a 34.7% increase • Electronic equipment - $18.23 billion – a 27.5% increase Source: China Knowledge

  15. US-China Comparison US China Meat 37 67 Steel 104 258 Oil 20.4 6.5 * Coal 574 804 Fertilizer 19 41 Million Tons per year except Oil at million barrels/day * 30% annual increase

  16. Mexico E-Scrap Producers

  17. Mexico’s Silicon Valley Guadalajara In-bound processing (Maquiladora) Electronic components, supplies and Machinery $88 billion (2003) $91.3 billion (2004)

  18. Aluminum Copper MEXICO

  19. 310,000 m/t of scrap ‘03313,000 m/t of scrap ‘04 E-Scrap

  20. Guadalajara’s Initiative • Financial Incentives (high tech sector) • Distribution and Consolidation for technology trade • HP • Sanmina - SCI • IBM • Trade Zone • Communication: Rail, Trucking, Air, and the Port of Manzanillo (3 hrs from Guadalajara) • On going investment in Infrastructure – To Improve Competitiveness • Shanghai / Manzanillo Preferential Agreement • Cosco and China Shipping (Direct Shipping) • International Business Development Center (Incubator) • On going investment in Education – For Higher Value Added Production

  21. Primary Goals • FOREIGN INVESTMENT - Attract foreign and trade-related businesses via financial incentives and amplifying Guadalajara’s international advantages. • TRADE DEVELOPMENT – Assist Guadalajara area businesses in expanding their international trade interests. • ADVOCACY - Enhance Guadalajara’s international trade infrastructure and position through advocacy and project development initiatives.

  22. A View to the Future • SHORT TERM: • Development of New Freight Corridors = New Opportunities for Guadalajara • Logistics/Distribution • Value Added Activities • Triangulation of Trade China – Mexico – US • Growth in China = New Opportunities for Mexican/US Exporters • LONG TERM: • Attracting Foreign Investment from China • Manufacturing Costs will Rise in China = More FDI

  23. It’s not the price stupid It is the margin

  24. Carlos Roveloemail: crovelo@aol.com

  25. Some China Milestones • 2000 – largest refrigerator and TV market • 2002 - largest mobile phone market • 2010 – largest PC market • 2030 – largest economy on planet

  26. Outline • TRENDS IN US, MEXICO & CHINA TRADE • GUADALAJARA’S INVESTMENT IN THE TECHNOLOGY SECTOR • LOOKING AHEAD

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