Hong Kong and Chinese importers should explore Mexico’s wide array of manufactured goods such as telecommunication and high-tech products, not just its traditional food and spirits exports, according to a former Mexican official.
“Mexico’s food and spirits markets are very mature. Our tequila has been here in Asia for a long time. We should go beyond berries, wines and spirits and look at other options,” Andres Rozental Gutman, former Deputy Foreign Minister of Mexico and a career diplomat, told EJ Insight in an interview in Hong Kong.
Rozental said Mexico is a big manufacturing country offering a broad range of industrial products.
“About 80 percent of our economies are on the manufacturing side. We are very different from a lot of other Latin American countries, such as Brazil and Chile, most of which are commodity-based,” he said.
“Our idea is to strengthen our relations with China. The future is here,” he said, given that growth in Europe and the United States is likely to level off for a long period.
“We are part of the North American Free Trade Agreement. We have a privileged relationship with Canada and the US. We need to open up more options and possibilities here in the Asia-Pacific.”
He said Hong Kong has a special role in connecting the markets of China and Latin America as it is a key business and transportation hub in the Asian region.
According to the Cámara Nacional de la Industria Tequilera, Mexico’s tequila exports to China are expected to double to 1 million liters in 2015 from last year.
Within the next five years, China may import a total of 10 million liters of tequila from Mexico and become the second largest importer of the spirits after the US.
Also, Mexico is also the world’s third largest exporter of blueberries after the US and Canada.
Following China, Mexico is the second-largest exporter of high-tech products such as cellphones, gaming consoles and computers to the US market.
It also supplies the US with large goods such as automobiles and aerospace products.
The Mexican government will bring some of the country’s young entrepreneurs to Hong Kong in January to participate in the StartmeupHK Festival 2016, a major event for the startup community organized by InvestHK.
Rozental said participating in the event will help Mexico better understand the Chinese market.
The fact that some primary schools in Mexico are teaching pupils to speak Mandarin shows how important the Chinese market is to Mexico, he said.
Chinese tourists to Mexico
Last month, Rozental had an Asian trip to Singapore, Hong Kong, Macau and Beijing, meeting officials and business executives and giving speeches in colleges on the topic of China’s role in Latin America and the importance of China’s presidency of the G20 in 2016.
In Hong Kong, he met Patrick Wang, chairman of Johnson Electrics Holdings Ltd. (00179.HK), which runs two plants in Mexico for the North America markets.
In Macau, he met Pansy Ho, managing director of Shun Tak Holdings Ltd. (00242.HK), who visited Mexico in June this year.
“We’re trying to get her interested in real estate opportunities in Mexico,” said Rozental, who leads his consulting firm, Rozental and Asociados, which specializes in advising multinational companies on corporate strategies in Latin America.
He said Mexico is a major tourist destination with a lot of beautiful beaches, where Chinese investors are welcomed to set up hotels and other tourism facilities.
Mexico also plans to operate ferry services to transport tourists from San Diego, California, to Ensenada, a coastal city in the Mexican state of Baja California. Chinese tourists who visit the US West Coast are one of the target groups.
Last month, Pansy Ho, as vice chairperson and secretary-general of the Global Tourism Economy Forum, invited Mexican tourism officials to Macau to talk about business opportunities in the tourism sectors of the four Pacific Alliance countries, which include Mexico, Peru, Chile and Colombia.
“At present, there are not many Chinese tourists visiting Mexico, except some groups, but the potential is strong,” Rozental said. “It’s very easy to extend a trip from Los Angeles to Mexico City, which is just 2.5 hours’ flight.”
Apart from tourism, Mexico is also trying to attract Chinese investors into the country’s energy, infrastructure and other sectors, he said.
In fact, Hutchison Port Holdings is now operating ports in Mexico while Huawei Technologies has become a major player in the country’s telecom infrastructure.
Trump’s controversial remarks
In his campaign, Republican presidential candidate Donald Trump made very controversial remarks about his immigration policy if elected into the White House.
He said the US should deport 11.3 million undocumented workers, including six million Mexicans, whom he accused of bringing crime and drugs into the country.
“Donald Trump is an entertainer,” Rozental said. “I don’t know how serious a politician he is. He has been very negative about Mexico and said nasty things.
“The only thing we can do is to make sure the Americans understand how important Mexico is to the US. Not only do we have millions of Mexicans living in the US but also the economies of our two countries are closely linked.”
By next year, Mexico may replace Canada as the No. 2 trading partner of the US while China remains No.1, he said.
Trade between the US and Mexico reaches between US$800 billion and US$900 billion per year.
“We have to take [Trump] seriously because of the damage he does to Mexico, but at the same time, it will end when he leaves the stage. And that will happen pretty soon.”
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