Mexico: Competition Between Taiwan and China in Investment and Trade
Mexico's economic activity grew 1.1 percent in July
Mexico’s economy, growing at a slow but steady pace, is attracting the attention of the world’s largest corporations. Mexico’s economic activity grew at a 1.1% annualized rate in July. According to the National Institute of Statistics and Geography (INEGI), a 0.6% increase was recorded in secondary activities and 1.6% in the tertiary sector last month.
This Latin American country is becoming increasingly attractive to strategic investors. In the second quarter of 2024, foreign direct investment (FDI) in Mexico reached a record high of more than $31 billion. As emphasized in the press release of the Ministry of Economy, “this figure is 7.2% higher than the figure recorded in the same period of 2023 ($29 billion).”
In this context, thanks to “economic stability, good business environment, and competitive advantages,” foreign companies operating in Mexico have reinvested profits of about 30 billion dollars. In the second quarter of 2024, the USA remained “Mexico’s leading investor” with 44% of total investment. Germany (13%) and Japan (10%) came in second and third place respectively.
And new investments won’t be long in coming: the Taiwanese tech giant Foxconn has announced a $241.2 million investment in Mexico to expand production of servers that will be used for artificial intelligence systems. Foxconn’s plan involves increasing its stake in FII’s Mexican subsidiary AMC Mexico, which already received $23.4 million of funding in February.
Mexico is also interesting for electric car manufacturers, with Chinese car company BYD announcing that it will open 22 new outlets in the Latin American country in the next two months, with the goal of reaching 100,000 electric vehicle sales by 2025. As Jorge Vallejo, General Manager of BYD Mexico, said on the occasion of the launch of the new car model, “the opening of the new outlets will allow BYD to cover 100% of Mexico, with a total of 50 stores, and for next year the goal will be to double sales registered in 2024.”
