Why Mexico is the NEW China
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- Опубліковано 24 тра 2024
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China has burst onto the world stage thanks to being the manufacturing center of the world for the past few decades. But all that success has lead to a growing middle class, higher wages, and combeind with trade wars, many are starting to look elsewhere. What offshoring meant for companies a few decades ago, NEARSHORING will be to companies in the coming decades. And no country is better poised to benefit than Mexico, and in this video we're going to try to figure out exactly why, and what it means. Let's go!
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Chapters:
0:00 - Intro
1:20 - Offshoring
4:30 - Trade wars
5: 40 - Rise of Mexico
8:00 - Nearshoring
11:50 - Challenges in Mexico
what we'll cover
two bit da vinci,mexico city,mexico manufacturing,mexico economy,mexico vs,mexico vs china,the new china,Why Mexico is the NEW China - The New World Factory,offshoring,nearshoring,mexico future economy,mexican manufacturing,rise of mexican manufacturing,manufacturing in mexico,companies moving to mexico,why companies are manufacturing in mexico,car companies manufacturing in mexico,mexico,mexico economics,is mexico the new china,mexico is the new china, How Mexico Is Secretly Dethroning China - World's New Factory, The FALL of China & The Rise of Mexico, How Mexico is BEATING China In Manufacturing!, Mexico is CRUSHING Chinese Manufacturing - Here's WHY, Why Mexico is the NEW China - Наука та технологія
I hope that the growth of Mexico's economy will mean an increase in quality of life for the people of Mexico.
I live in northern Mexico in the winter. The middle class in many cities in Mexico is growing quite rapidly. What happens when a growing middle class has more wealth? Traffic jams.
They're all coming here to the United States of America/Mexico
Hopefully this trend will also improve Mexico's public safety in general since many people in Mexico joined drug cartel gangs solely out of poverty in the past.
That depends on Mexico’s addiction to corruption and the cartels. Also, Mexicans are not Chinese/Asians.
@@chadgibson5708 Mexican immigration is actually negative for 2009 to 2014 although from 2015 to 2019 there was an increase in immigration. The common narrative is still incorrect especially concerning Mexicans. Others Central America countries have had significant increases due to the terrible situation in their home countries. A lot of those problems are gang related issues associated with the drug war. I’m not really trying to debate these facts I just want people to understand what the actual situation is like and not believe all the border drama hype politicians use for election campaigns although they don’t ever do anything about these issues they claim are so dire. We basically don’t have a functioning immigration policy which along with the drug war keeps the situation as dangerous as possible even though it’s not actually nearly as dangerous as they claim. The politicians choose not to make decisions and take responsibility for the immigration issues we do have because they don’t want to be responsible and also benefit politically from the current situation. Don’t believe the hype, you and I are being played as usual but it’s important to know how we are being played and don’t support the people that are in power in most border areas and in Texas at least the government has been in “conservative “ hands forever and they don’t do anything about it. I’m not a Democrat by the way. I think both parties are trash and wouldn’t vote for either just for the record.
Mexico deserves such growth. Good people, good food
Only problem is we love China. ! China and Mexico are cool ! unlike Trump Supporting Angolos
We love Chinese people , not evil , arrogant CCP government. @@underdogtv2855
Aand good panoramic views
We dont forget our motherland under USA occpuation; Alta California, Texas and Nuevo Mexico are mexican
You stole it from the native people. You are no better than the gringos.@@AndresAlfaroAtonal
i'd love to watch Mexico grow on the world stage. Their our neighbor, I want them to have more opportunities for jobs and more choices in what kind of sector to work in. i've been rooting for them for over a decade. It's fantastic to see it happen and I hope it continues no cap
According to PZ, Mexico will be the next China, in a good way.
It has the best demography in the developing world.
Its proximity to the USA cannot be overstated.
Many skilled technicians in Mexico.
Mexican workers are many times more productive than Chinese workers.
Mexican quality is much higher than Chinese quality. No "tofu dregs" construction issues.
Mexico has better environmental laws.
Mexico has its own fuel sources.
The USA excels in very low end and very high end manufacturing.
High end because people with insane skills come to the USA for more money.
Low end because energy is so cheap it's sometimes free, and no amount of cheap labor can compete with that.
Mexico is going to take a lot of the middle manufacturing jobs that China was doing. And they will eclipse every achievement China ever made.
China had ambitions of moving up the value chain to the high end manufacturing, but it never mastered quality manufacturing. Chinese products are usually complete garbage.
I actively avoid buying Chinese goods whenever possible. Way too many bad experiences.
I can't remember ever having problems with Mexican goods. They seem fine.
Mexico and china are friends this video is propaganda . we lo Chinese people unlike Trump supporting US people .
We the mexicans, need USA help, for better NORTH AMERICAN REGION....
Mexico with the living standards and infrastructure like the U.S. and Canada would be amazing.
Actually Chinese made products are very good now. Tesla's best made vehicles that rival the quality of European vehicles are made at their Shanghai plant@@protorhinocerator142
I am so happy to see Mexico on the rise, and I hope they become the next huge success story as an industrial and rich nation!
Very likely. They are perfectly poised to steal China's position in the world.
And by steal, I mean earn.
Of course, what they don't tell you is the investments to build manufacturing in Mexico comes from China. Mexico does not have the money to invest in manufacturing.
GRACIAS , PERO NO ES ASÍ ! NOS VAN A SAQUEAR Y TRATAR COMO ESCLAVOS MODERNOS 😮💨
Muchacho needs more education , me no speak English means that Mexico can not go forward .
@cashcash5995 A lot of Mexicans can understand English.
But even if they didn't, Mexico is not unique--many French, Japanese, Italians, Austrians, Chinese, etc. don't understand English and they get on just fine.
Spanish is the second most natively spoken language in the world, and that has facilitated trade in the Spanish speaking world making Mexico the largest Spanish speaking economy ahead of Spain, Argentina, etc.
My vehicle was made in Mexico, never had any issues different than other vehicles. We are no longer really building our own stuff for our own consumption. So lets elevate this amazing country just south of our borders.
Should be made in USA
@@andia968 too expensive
It s true, Mexico builds its own car, it has 2 models, Pancho Villa Xl or Zapata Pt cruiser, way to go Mexico, also great exporter of Guacamole and Cocaine.
@@victorthenotsogreat1975 we don’t need racist shi
@g1g4_ch4d7 Also with Usa in partnership the AMLO is built, the American Motor Lopez Obrador and also a new electric car Chapo Guzman Sport Edition.
Happy for brothers in Mexico from India
Viva a Mexico Primos! ✊️ ...I'm Filipino n I support.
Philipinos r very nice people too 🙋
Viva filipinas too greeiting from 🇲🇽
Muchas Gracias
@@blackdimondx6049 serio! Filipinos y mexicanos are primos. Egual sangre de espania. I speak a little bit. Pero mi awelita and awelito. Lastname.....Gonzalez and Alverez. Viva la Raza primos. ✊️😄
I have No Doubt bro, many years ago when I was just a Older Teenager I was working for My father, we where Repairing a broken Water pipe, and replacing a few Sprinklers for a Customer whom I believe was Filipino she treated us with such Kindness, and Respect. ...To this day I've never forgotten.
Update: Mexico is now actually the 6th major auto producer in the world, not the 7th.
I´m sorry if my english isn´t perfect. I´m Mexican living in Queretaro. And i´ve been watching a lot of industries moving to the country in the last years, and honestly i´m super greateful, and truly believe that together we can create the most powerfull and rich continent in the planet! North América! Best wishes to USA, Cánada and México.
@Adelonge209 your English is great, I also have family in QRO and I agree, just Queretaro itself has grown so much, my cousin is an engineer himself and the growth in the last decade has been astronomical ! 😊 Juntos si se puede Saludos desde Houston, TX 🇲🇽🇺🇸
Hell yeah!
Your English is great. Yes, Mexico is becoming great. You can see this in migration (Most ppl coming to the U.S. now are from central and South America, Haiti and China), and more U.S. citizens are moving to Mexico.
Thorough analysis! I agree. I have been rooting for Mexico for quite sometime hoping they can get it together politically. My mom is American with dutch ancestry. My father was from Mexico. Quite a contrast. I used to travel to my dad's hometown when I was a kid. Wonderful people in that town. Lots of fond memories. Safety concerns while traveling ended those trips.
I take it your pops is from tierra caliente? Yeah that happens .
I truly expect Mexico to break through the middle income trap and become a high income country due to its connections with the US. Mexico can also bring in labor and supply chains from Central and South America. By 2050 North and Central America's combined workforce will be bigger than China's and largely self sufficient.
If that happens they'll lose their manufacturing edge.
I visited my relatives in Monterrey, Mexico in May of '22. And HOLY CRAP!!! I saw global brand manufacturing on another level. From Callaway(golf), Brembo(racing brakes), to a humongous brand new KIA(automotive) plant.
Not only that but one of my cousin's husband is an engineer and works for a company that makes electrical motors for companies all over the world.
Monterrey is Mexico's most industrial city. That being said I prefer to stay in "el rancho." There are more goats than people there. So quiet and the city is only about an hour away.
I"ve been telling people Mexico is going to grow economically recently. This cements that thought.
Facts: In order to evade ongoing or oncoming sanctions by US, more and more Chinese companies are expanding their factories in Mexico. In this way, the exports of Chinese goods made in Mexico to US can enjoy low tax or no tax at all due to free trade treaty between the two countries.
Shhh..🤫 don’t tell these idiots
Some factories did go from China to US in short term, but the US is the largest investor in Mexico. The Chinese factories will close in time because the labor is cheaper in Mexico and these factories don’t support the CCPs main objective which is to provide employment for its citizens.
European companies do the same (since they are not a part of NAFTA/USMCA).
Nothing different under the sun.
Not only do German, French, and Italian car companies benefit from lower labor costs in Mexico (and have for almost a century), but also lower taxes, being made in Mexico and exported to the U.S., than if the cars were manufactured outside of Mexico.
Why companies like Audi, BMW, Volkswagen, Stellantis (Dodge, Fiat, etc.) have expanded or have announced new plants in Mexico in the last few months.
@@danmur2797 China wasn’t even among the top 5 countries in FDI last year.
Mexico also will inaugurate at the end of this year the inter oceanic corredor which is basically a dry Panama Canal and will be a rout to the east part of the USA , it will also be a manufacturing hub all along the corredor which will ship out goods all throughout the continent
This is ironic, 25 years ago Intel's first chip fab outside the US was, guess where ? Yes folks - Mexico
Is not an irony at all , ,the world was very different to what is today 25 years ago , china was a fishing and rice exporting third world country , and everyone was poor but thanks to the brilliant leadership of the Communist party they developed China to become a world example of success.. The people that makes this video " that mexico is crushing chinese manufacturing" , have Zero intelligence in the subject.. of world economy. Reality is that Mexico WILL NEVER crush anything on China , neither replace it at all ,never will happen , not even close. Just think for a moment about it .. Why American governmemts in the past did not ,moved all their companies to Mexico and save a ton of money in the process , specially in transportatiion fees that Mexico is right next to US border? DId you really think american politicians did not though about that one ? Mexico Governments have been always historically friendly too America ,so why take so huge risk in moving their companies to China? THe reason why this video is so wrong , is because the author dont understand anything about the subject.. Such kind of topics , like manufacturing American products outside their borders , is 100% connected not only to the economic gains with cheap labor. but is even MORE CONNECTED , to Politics.. When a man give flowers to a girl .. you think he did it , just because he is a good man? When a man give roses and chocolates , HE WANTS SOMETHING BACK from that girl.
SO is exactly the same principle.. For American products to be ever produced in what George Bush called Axis of Evil , their eternal enemies which is CHINA and SO RUSSIA and iran too.. Is for a really many important reasons.. Is because American Government but also American super rich elite wants something back.. is an simple as that.. Same way a stranger Roses with chocolates in san valentine day , is because he wants something back. He wants to influence the girl ..all the way to bed. So This is just one of the powerful reasons why American business moved to CHina.. They want something back from China.. is called Support, Economic Alliance ,and military alliance , to have the chinesse following American interest, they offered a lot of jobs back. So moving American companies to Mexico ,will NOT help United states in any way to improve relations with CHina.. see this? So because American elites wants to rule over the entire world , then they either influence CHina their way to bed ,with business , and that didn't worked or they break china with sanctioons ,that also didn't worked either , provoking a civil war with Covid or hong kong protest that they financed neither worked , and what is left is either abandon the American world empire project or start a world war 3 with CHina and Russia at same time since they are allied .
Another thing that the video don't understand is Business Opportunities.. Why would United States move all their business to Mexico , if they already have Mexico in bed with them since always? for the only reason they send some few business to mexico , is to keep them loyal to american interest and don't invite their Competition ,, ie.. CHINA or Russia or IRAN to replace them .. Because allowing your enemies to flood with business in your country borders,, not only this threaten your own business , but also allows your enemies to deploy military bases right next to your borders.. which is a red line for United States.. for example allowing Chinese Army to have miliary bases in MExico is very dangerous for USA security.. Since China have nukes and those could be fired from very close distance to USA if they allowed to conquer Mexico business and then later military bases next. So Everything you see in the world in terms of economic deals and economic trade , when it comes to United states.. Is 100% directly connected with world POLITICS and Nation special Interest.. which in America case , their interest is World Domination.. and until China and Russia not in bed with United States, Until Russia and CHina not aligned with Amerian imperialism , then Mexico will never be a replacement to any nation.. Mexico replace no one.. The only benenfit they receive from moving their manufacturing to Mexico , is to keep CHina and Russia or IRAN away from mexico. Heck if United States wanted cheap labor , nothing stop them from hiring Prisoners , from their jail system.. or hiring refugeess , illegal immigrants and pay them only with food .a misery.. But is not about cheap labor , is about total spectrtum Interest nothing more and nothing less. No even India replace China , Because they need China under their control one way or another , or else they will need to Fight them with their military. because what Americans wants is to get CHina under their influence , so they don't have to fight them. This is what is all about US policy with CHina. If CHina not under control by United States ,they could replace United States world position and defeat all american business
and collapse America economy . another bonus of doing business with china , it makes sense to have always cars production in China ,to save a TON of Money in shipping American cars to Asia , from asia , than from United States to Asia. and if that was not a win/win already for doing business in China.. CHina have 1 billion population ,thats 10x times 100 millions and Mexico population is only 1 time x 100 millions so the market for American companies whether is Cars , or electroonics or medicine is 10x times higher in CHina if not more, than in Mexico.. So again in what Way MExico is "Crushing" chinese business? in no way.. they can't be compared at all.. The company Apple for example sells more iphones in CHina ,than in United States and Mexico combined.. And if Apple move away their business from China , China bans iphones sales there and that will be a huge profit drop for Apple more than 50% drop .. So this is why MExico ,or any other nation in the world will NEVER on its entire life could replace CHina.. China economy market is too big , to be ignored.. CHina buys a lot more from United States ,that all Latin America and European union markets combined. This is why ELON Musk sells more Tesla cars in China than in United States. AMerican politicians hoped than by sending American business too China , the chinese were going to give away their nation sovereignty and accept America to control their nation , but they are not fools.. They knew what was all about US generosity of sending thei business to china. they American simply wanted china in their bed.. and they took the flowers but no bed. Just business relation ,whenever it benefit them and nothing else.
😮
guess to whom Edison took from most of his ideas? the answear is Jose Francisco Estrada - yes a Mexican but as well Edison had Azteca blood runing his vanes - Edison was Mexican as well but he went for Edison and not for Alba.
show your math@@espaciohexadimencionalsern3668
This is great for prosperity of both Mexico and the U.S. That's great to see.
This video is going to put Mexico really on the map and open the eyes for the people who plan to open up a business soon.
Finally. It makes sense for the US and Mexico to a lot more business together.
They deserve rising wages, better employment, and we need to have much better relations with our friendly neighbors.
It’s much better for friends to be in business vs our adversaries.
Mexico has 13 Free Trade Agreements (FTAs) with 50 countries
But is only neighbor to one economy that matters!
1:23 It is Chinese Yuan not Yen which is Japanese.
Tells you lot about their understanding of China, he's one of those people who'd beat a Japanese person just because he was pissed off at Chinese President Xi
Mexico is an honest country!! ⭐️
Great presentation and I think that you're on the right track. One big challenge that Mexico has had for a long time and needs to solve is the corruption that is wide spread in that country. If they conquer that they have a fighting chance.
Most corruption comes from USA buying politician, the CIA release a document detailing how they been buying off corrupted Mexican presidents...
There's a Mexican saying, "so far from heaven and so close to USA".
I would absolutely LOVE to see a high speed freight system between the 3 USMCA countries. Run it from Montreal Through Toronto, Windsor/Detroit, down through the US (the states could bid it out for it's lines but I'd envision it cutting across i70, i74 and i65 for all of the cities to access, then on towards Memphis, cut the i45 between Dallas and Houston, towards Laredo) and into Monterrey, have like 2 dedicated lines towards each direction and use it kind of like a toll highway, where there are no direct exits to customers, only to localized hubs/lines which can then branch into the customers in that city/region. Reduce the amount of slower traffic on the main line, I almost envision it like the train version of pneumatic tubes, but without the whole closing it into a vacuum and complicating things beyond control. *cough* hyperloop *cough cough*. I also think something like that would incentivize more cities to build high speed rail in order to tap into it's trading potential. It could even be extended down further and connect the entirety of the western hemisphere eventually. And oh good lawrd do I mean eventually lol Thanks for coming to my TEDtalk ^.^
Celadon trucking used to run them lanes.. Think CFI took over most of that .. used to at least 3 runs a month to and from Laredo.. I was on a Texas regional for a couple years Laredo Del Rio Brownsville and El Paso were my most used yards
Thanks for the pipe dream. They've been been "brainstorming" HSR in California for only 20yrs now. CHSRA was established in 1996, they did some deep thinking about it for 10yrs. Then for the last 15yrs they've really dug into the funding and red tape and got some deep conversations going about that 100mi of track. Meanwhile, in the last 20yrs China's built out 26,100 mi of the fastest HSR in the world. The comedy of this video is that people have been talking like this for decades. China is currently the #1 exporter to the world and their major rail/port projects have been poured, dried, completed for over a decade. Also, they don't have drug cartels controlling local governments like Mexico, so the major customers even considering this man's dream would be the US and Central America mostly. Brazil is in BRICS. This is fantasy.
@@jamesray9009 CP bought the KCS forming the CPKCS The 1st three country railroad Canada, usa,Mexico that's kindve a big deal,altho rail service needs to speed up.
HSR for passengers was bad enough but now for freight too? Looney beyond imagining. So you would LOVE it? It's funny how no one with money to invest thinks so too.
Good idea, great idea really. It would take way too much money to buy off all the politicians, localities, securing land rights, labor unions, the list goes on. USA is stuck in the mud with "legal" special interest corruption of their own from small towns all the way to DC, probably only UK is worst for that. Not even Musk could get light rail transit to work on a large scale because of this. I forgot what season of The Wire it was but it illustrated this perfectly.
Best wishes to Mexico!
No need to find problems with China... best wishes to China!
You don’t have to be number 1 to do well.
🌎⌚️
Good luck with your child labor and facism.
Rising tide lifts all boats, need not tear down others to do well ourselves.
Creating high-speed, reliable rail lines between northern Mexico and the US would probably also greatly impact trade. I believe that the high volume through the border crossing probably has a negative delaying effect. Long trains can pull dozens or even hundreds of freight cars loaded with manufactured goods.
Well... Living here i can Tell You there is one Train that runs until the Border and several people from all places, Mostly Venezuela, use that Train to Enter illegaly, i don't know where that Train goes but at least close to the desert between our nations
Mexico and all the people have so much to give. Both UsA and Mexico will be seeing huge leaps in wealth ... As long as there is a win win . Global communities will fruit from it.🎉❤
Couldn’t agree more
I started saying back in the 90's that the way we were managing things from the USA were going to eventually land us back as the low cost labor option...quality would drop so low and costs would go up so we'd have to eventually go back to making things domestically for our own consumption.
I guess Mexico is close; theoretically you can drive there, so...
Basically, China was 2000’s version of what the US was in late 1800-1900’s; low labor costs and product components close by and easy to use logistics. That is why most of the US logistical systems/suppliers in the US were shipped over to China in the 80’s/90’s to make the complete chain run smooth and reduce costs to bare minimum possible.
The US did it to Europe in the late 1800’s-1900’s, China did it to US in 80’s-2000.
Corporations move the logistics to wherever labor is cheapest and have the current generation of workers train the next before kicking them to the curb; also why the huge surge in Chinese students at US schools starting in the mid-eighties so they could lay the groundwork for logistics and support transfer of the 90’s.
China crossed the labor costs line so now the move is on to India/Vietnam/etc for the non-Americas market and Mexico for the Americas.
It only took China only 70 year's get to to Year 2000. Amazing right? Leading in EV's and Solar Panels renewable energy, even their Cheap DJI drones are #1, even The West wants a peice of it!😂
China’s total trade is at 5.4 trillion USD a year
India with a younger workforce, larger workforce, and lower wages had a 100 billion USD trade deficit with China
Vietnams economy is dependent and dominated by ethnic Chinese and their companies
While the Vietnamese economy is dependent on the Chinese economy
China actually sends its goods and services /trades with its Belt and Road partner countries
While these days it is mostly US multinationals in China using their wholly owned factories and suppliers in China
To manufacture and send goods back to the USA to purchase
They are the companies still using the same labour intensive highly polluting factory model. But these days using more and more illegal workers from SE Asia or more and more automation in those wholly owned factories in China
Exporting their goods to America inflating those Chinese trade deficits with the USA
We really need to see these poorer countries improve their economies and increase their quality of life. Every time, a better quality of life leads to less crime. Most people just don't want to have to feel like every day is a struggle to survive. That said, it would be nice to be able to imagine how much humanity would benefit from less corruption and greed.
Another great video @Two Bit da Vinci team!
When they make profits, US will always reap the surplus as long as if it’s able to.
So far, no way they can grow rich. They are, at most, another US factory. But since they adopt democracy, it’s even easier for US to get their hands on their economy.
poor countries, like the USA
😂😂😂
Yet crime has significantly increased in the states over the past 60 years. I'll stay in Thailand, very little crime, low cost living.
It would be excellent for the United States to stop selling weapons to the Narcos, I mean this literally, because they are also the number 1 consumer and it would be perfect for them to stop consumption to put an end to drug trafficking in both countries.
One thing to add. Ask yourself why countries like Japan and Germany have robust tech and manufacturing sectors despite relatively high wages.
You own that. Is different than just making cars or export fruit. If you invented technology the income on making it is higher then than just exporting goods
I've personally saw examples, where companies in Eastern Europe couldn't compete with the company doing the exactly same products (sheet metal components in this case). Cutting edge automation wiped out the difference in the labor costs, helped by difference in transport costs. This applies to more serial production of course.
China’s behavior towards its neighbors as well as foreign companies that manufacture there has made a lot of corporations uneasy about continuing their operations there so I don’t think the trend of moving production to Mexico will slow down any time soon.
China is a dictatorship that incorporates some private industry with central command. Mexico has a civilian elected government that is subject to regional warlords (cartels) and massive criminal activity. Also, Mexico wobbles between a democtatic government and private enterprise economy and incompetent and corrupt socialist dictatorships. Modernizing and advancing Mexico's economy is a huge improvement for the people of Mexico and should, over time, reduce corruption and criminal activity.
It would be excellent for the United States to stop selling weapons to the Narcos, I mean this literally, because they are also the number 1 consumer and it would be perfect for them to stop consumption to put an end to drug trafficking in both countries.
Mexico has not realized their county's great potential. I love Mexico. they only need to promote tourism and free tourist from harming then. Mexico is beautiful.
Promover el turismo? Si somos 7mo nivel mundial 😊
Brilliant video. Thank you :)
One thing not touched is the Interoceanic corridor in Southern Mexico, an alternative to the Panama canal with industrial parks build along the corridor to facilitate manufacturing.
The offshoring to China depended on cheap labor, and cheap shipping. Labor prices have gone up and up in China which is why some companies have moved to Vietnam and Cambodia, but cheap shipping ended in the pandemic and hasn’t come back. Especially now with the Panama Canal having reduced capacity due to drought and the Red Sea/Suez route coming under occasional rocket fire from Yemen.
Mexico is finding itself in a prime location being able to ship east, west, north, or south. Mexico has been a middle class country for awhile thanks to trade and manufacturing. It’s also a pretty big oil producer but they have neglected their infrastructure.
Now Chinese companies can build factories in Mexico to get around the tariffs and save shipping costs. They are already selling cars there
With a heavy infusion of American money, as American companies are rushing to replace Chinese factories with the same or better in Mexico.
That will mean electricity, roads, rail, training, all that.
The guy is giving a US centric point of view
China’s total trade is at 5.4 trillion USD a year
India (who has a trade surplus with the USA)
with a younger workforce, larger workforce, and lower wages had a 100 billion USD trade deficit with China in 2022
Vietnam (who has a trade surplus with the USA but trade deficit with China) its economy is dependent and dominated by ethnic Chinese and their companies
While the Vietnamese economy ad a whole, is dependent on the Chinese economy
What most people don’t know
China actually sends its goods and service /trades, with its Belt and Road partner countries
While these days it is mostly US multinationals in China using their wholly owned factories and suppliers in China
To manufacture and send goods back to the USA to purchase
They are the companies still using the same labour intensive highly polluting factory model. But these days using more and more illegal workers from SE Asia or more and more automation in those wholly owned factories in China
Exporting their goods to America inflating those Chinese trade deficits with the USA
I can’t see that being any different in Mexico
Americans will cry about trade deficits. But protect their multinationals doing the lions share of the exporting to America
They are just lucky China has not booted those American manufacturers in China
Probably viewed a crashing USA as bad for the world economy
And makes sense because they did not even pull out their big trade weapons during this trade war
Pretty soon our cars will be made in Laos or Thailand where it will surely be made cheaply where it won't last more than the cheapest Hyundai car
Great analysis - it will be interesting to see how Mexico upgrades its infrastructure.
One important factor it’s geographic location where I can ship to Pacific and Atlantic oceans. And there’s a railroad being built to connect both ports.
Very good analysis of the upcoming industrialization and increasing value of Mexico to the world and in particular the U.S. economy! Near Shoring has become an important idea after the pandemic and the problems that occurred with availability of bringing products worldwide while transport was glutted with the opening of goods and services across the world. Mexico is drastically improving its infrastructure, stimulating and improving its railway system and building new and improved railways and airports! The most exciting project is the Transisthmic railway which will connect the Pacífic Port of Salina Cruz to the Atlantic port of Coatzacoalcos along with 10 industrial parks along this route for value added capability! Plus the 4th energy transformation which seeks to make Mexico self reliant in terms of energy production and enhancing our productivity of green energy sources including nuclear and geothermal energy! The future is bright for the economy and the importance of Mexico!
Due to ocean logistics, Mexico will probably only be the manufacturing hub for the Americas. Eurasia, Africa, Australia and New Zealand will probably be Asian and India manufacturing.
Aside from the American Economy and Consumer being the source of approximately 30% of all global demand for all products, the cost of shipping is so low that distance is relatively insignificant if the product isn't perishable and can be delivered anywhere in the world in a couple weeks. And since the US is probably the lone place in the world that is unaffected by a global recession, for at least the next few years destinations other than the US will be less important.
With the Interoceanic corridor along the isthmus in southern Mexico, and business parks opening there, there's a big little analyzed advantage that foreign companies could exploit to export to other regions of the world.
As an example--Brazil like Mexico has for a long time been a low cost car manufacturing power.
However in a recent analysis, European car manufacturers saw that it was more costly and less efficient to produce cars in Brazil than Mexico. Mexico and Brazil have a trade agreement, and cars were not a focus of trade between the 2 countries, because Brazil thought it could outcompete Mexico, and perhaps sell to Mexico one day. In reality the opposite happened--Mexico is outcompeting Brazil on low cost, reliable, and efficient car manufacturing where it's cheaper to make in Mexico and sell in Brazil. That perked up the attention of Brazilian trade representatives who have been very protectionist about their industries. Side note, despite Brazil having almost twice the population of Mexico, Mexico now produces more cars and vehicles than Brazil--and even more than Germany.
If cheap cars can be made in Mexico to sell in faraway Brazil (that has a lower GDP per capita than Mexico), it's feasible Mexico through the Isthmus could become a manufacturing exporter to Europe, Australia/New Zealand, Africa, and even parts of Asia, since its a lot cheaper to manufacture in Mexico, than all the developed countries. It's also already cheaper to manufacture in Mexico than China, which is part of the reason, Chinese companies have been moving some manufacturing operations to Mexico.
Mexico would be a Great trade partner. Mexico gov. and business partners need to stabilize security and invest in infrastructure. This would be great for U.S, Canada and of course Mexico itself.
i saw it coming. i talk to my amigos where i live and predicated bueness in mexico.
Where's the fire? (auction?) High speed delivery reminds me why I preferred your channel to Matt Ferrell's 3 years ago!
Then ad slowed down a bit, and pace was closer to your normal, after.
My content target is stuff that takes 80 - 90 % of my focus, so I can use both hands to pick my nose.
I'd spend more time with that New Yorker, Casual Geographic, if he wasn't hard work to follow. He's hilarious, and worth it, but involves many backups for "what was that?"
I tried 2 repeats and didn't get the A word in your Chinese battery company. It's an OCD thing.
Best wishes; still a subscriber. Thanks for doing this!
Overcoming crime while increasing personal freedoms will be challenging but worth it!
nice one ricky
What a well researched topic.
Awsome reporting !!! I m thinking of a small business in Mexico 🇲🇽. Thanks ☺️
Another revealing video, good job!
Very well explained thank you
Brilliant video. nice work
In the city where I live there was a point where a lot of chinese companies tried to invest in Maquiladoras and other bussineses also there are inmigrants that opened their restaurants and stores.
This could be an interesting development of Central America, as Mexican labour becomes more expensive, countries like Guatemala, Honduras and Salvador could be integrated to the Nafta supply chain and I suspect Mexican capital is going to be key for that.
Another interesting posibility is a political transition in Venezuela that would allow the western hemisphere to be more energy self sufficient and the country has a massive green energy potential to produce heavy industrial products at a much lower carbon footprint.
Time will tell.
Funnily enough the hard data is showing US share of direct investment in Mexico is staying largely the same, yet China’s share is rapidly growing. Isn’t this just a repeat of Japanese automotive in the 1990s but in Mexico…
I don’t think even the Chinese want to invest in China. Its not safe, the government can just take your money
I really hope that Mexico uses all the trends of investment from China not only for the growth and thriving new cities, but to be more independent and close up the manufacturing and innovation aswell.
Very good insight, hope it does
What's really interesting is that Tesla went the other way and built a new factory in China recently, despite China's worsening economy and the clear competitive disadvantage Tesla has vs China's domestic EV makers.
And its one of Teslas best moves. The China factory is hugely successful for the company…
Thier next factory to be built is going to be in mexico
Thier next factory to be built is going to be in Mexico
The factory in Mexico has been halted recently.
The Mexican giga factory just got approved and Mexico will pay billons to help built it.
Great presentation Ricky
Glad you liked it!
Mexico, USA and Canada (NORTH AMERICA REGION) LOVE TO NORTH AMERICA REGION...
I'm a Mexican studying Industrial Engineering and I'm excited for the Mexican future.
Great video 👍
The question in manufacturing is if automation will negate labor costs and make it purely component logistics?
foreign manufacturing could be greatly reduced when it comes to the US because shipping then becomes the driving factor and mostly automated manufacturing combined with components produced near by, also with high automation, with possible automated/self driving shipping and delivery of components and finished goods could significantly impact the end result.
Very true. Although it's good to point out that automation (as well as AI, for that matter), while reducing the overall need for lower-skilled labor, also increases the demand for technical and highly-skilled labor, the likes of robotics, mechanical, electrical, and software engineers, among others. Those don't come cheap in first-world countries. In that context, Mexico, with its I-don't-know-how-many-bunch of engineering grads every year is well-poised to keep benefiting from nearshoring, especially with increased international investment in the country.
China didn't start out like a well oiled machine, it took significant investment from companies like Walmart, Apple and so on to get things to where it is today. Now companies are looking for alternatives post-covid, that's where counties like Mexico, India, and Vietnam come in at. Companies are going to have to spend Billions building out their infrastructure and getting those countries ready to handle the trade volume. The most interesting part about companies moving production out of China is the Chinese companies doing the same. I remember hearing of companies moving production to Mexico when GM and Ford announced plant closures years ago. Mexico isn't without its risks because there's still a drug war going on and the government has been somewhat incompetent.
I cannot say about Mexico, I live in the EU, and we had to diversify, too. China is out biggest ally and trade partner. But right now, its all about cars. The chinese models are way cheaper and better than all the german ones, so the EU put taxes on import, not to ruin the local industry. I wonder where that goes in the future.
Futurama's Bender Rodriguez was 'hecho en Mexico'...
Good work!
Very good info.
Super cool vid! I wonder abt the water supply piece that has been highlighted as an issue by Tesla
An additional component - if immigration to the US is indeed for personal economic improvement - a successful Mexico and Central America will remove some of that pressure on illegal crossings to the U.S.
Volkswagen AG is the world's biggest auto manufacturer with a revenue of $284.34 billion in 2022. The automaker, which ranked second position in 2021, replaced Toyota Motor Corporation which was previously number one on the list. The Germany-based automaker produces passenger cars, trucks, and light commercial buses.
I think one of the bigger factors is what happened in Russia - many foreign companies sold everything at huge losses to exit the country. It seems likely that it could happen in China, so everything invested there may be a total loss.
With manufacturing and factories being transferred from China to Mexico, we may have a partial solution to uncontrolled immigration into USA from Mexico. If the jobs are in Mexico, then people will not have to move too much from Mexico to other places.
The migrants crossing the border are from Venezuela, Honduras, Guatemala, El Salvador, Haiti, and China (not Mexico).
The issue at the border is because immigration laws allow folks to cross illegally then claim asylum. Then that process takes years.
Recently the GOP put together a bipartisan bill to fix the loopholes and disqualify people illegally crossing from claiming asylum (and quickly deport them), but Trump is telling folks not pass their own bill because it will help Biden in the election (because the GOP has been running elections with claims to fixing it for the past 40 years). Asylum is legal, and needs to be updated. Fencing and EOs don’t change laws.
Our growing economy time has arrived and we will assure a continue grow also in education, security, roads infrastructure to become an stronger US commercial partner and make transactions quicker to supply need and demands with must quality control over customer’s expectations. Very good research!!!
Check out the growth rate of trade between China and Mexico in the past 2-3 years. You will then understand all products are still made by China
Chinese manufacturing in Mexico still accounts for less than 7% of manufacturing goods.
European, American, Japanese, and American companies have a much larger manufacturing footprint in Mexico, and especially European and American companies have been doing so a long time. They too have been expanding in Mexico. Companies like IKEA (Swedish), Lego (Danish), BIC (French), Audi/Volkswagen/BMW/etc. (German), have all in the last 2 years announced new opening or major expansions of existing operations.
I welcome it. Mexico is better aligned with the USA in terms of worldview, and there are much less thorny political political issues and disagreements between the two countries, so makes a lot of sense to shift the business to them.
Interestingly, here in San Antonio I have been seeing Mexican railroad cars increasing.
About time.
Ricky, Mexico is just one piece of the puzzle. They have moved up in the value added mfg over the years. Another country that will benefit from near shoring will be Colombia. They are a little behind Mexico in value add but each step in the mfg and parts process is important. BZ
Columbia is in the USA, Colombia is the south American country
@@jorgeh2030 do you feel pretty good about pointing out a spelling error? Either way could be part of Venezuela. Did I spell that right?
Jjajaaja you seem like you have something stuck up your ass! All defensive because somebody tried to explain a common mistake usually made by rednecks 😂
Chill Henry! If you are less angry at life, your family might talk to you again at some point 👍
Great video. You might be interested in in George Friedman's book, The Next One Hundred Years. It was originally published in 2000, updated in 2010, but as it examines long term patterns in economics and geopolitics it remains very relevant. You might be surprised by his analysis and predictions regarding Mexico and the US toward the end of the century. They are consistent with, and an extention of, your analysis here. Check it out. And keep us updated on this front.
I have dual citizenship in Mexico and will be investing heavily.
Congrats! I had only heard of this as a possibility like a year ago. I was able to submit everything and get dual citizenship too.
Mexico's path to success is clear by now. Guatemala might be turning soon.
You need to update this video lots of things have changed for the better in mexico
Near shoring, what happened to Outsourcing term ?
Until the cartels ask for their cut
Cartels largely don't exist where manufacturers operate.
Also Mexico has been manufacturing for decades.
@@danmur2797 yes. rather poorly. My Dodge Ram quad cab was made in Mexico and made poorly. Not good quality control. Though I would suspect that would improve over time, provided the cartels get destroyed
@@tinytim71301 Mexico has made many other car models/brands for decades without issue.
Volkswagen, Audi, GM, Toyota, etc.
Maybe it's just the particular model you bought which comes down to that company's engineering and design.
Agree It took me awhile too👍
9000 is on the high end My ex she was getting paid as a manager only around $3,500 US a year 60,000 pesos and there are jobs that had lower wage My ex was working 13 hours a day everyday except for Sunday 78 hours a week working in a bicycle plant It would have been about $1,500 a year although rent there is $50 a month it's not a lot of money a lot of basic things are bought with loans and people are taken advantage of with loan sharks having extremely high interest and hourly compounding so it basically can make you a debtor for life Mexico's beautiful the people are amazing and they're very hardworking but it feels like other countries are exploiting them big time a lot of electronics are also more expensive phones for instance they can basically resell for close to their original purchase price and land is extremely expensive compared to income base
If the trend is to cheaper labour costs, does this not mean automation (ie not human) will shift production to where energy is cheapest? Mexico has plenty of labour, that may not be the most important soon as automation replaces it. It has sunshine but it's intermittent. Production is dependent on several resources, land, unskilled labour, skilled manpower, energy, transport routes and local market. Logically each continent should have a manufacturing area with transport links, energy and mineral resource. The other driver is consumption, who buys the stuff, especially if the labour can't afford it? We may get cheaper stuff but it has to be bought.
it just show that we need the 3d printer... They need to fix the issue they have with printing metal so that the factory could print things up. That way instead up shipping over sea they could just be printed cheaply and nearby.
What is different NOW, that was absent in Mexico B4 the Cpvid-19 pandemic & US/China Trade war? What has made Mexico so much more of an attractive trade partner that was not possible in 2017?
Paul M
Atlanta, GA
Opportunity and motivation.
The exodus of Chinese manufacturing has been a slow burn for about 10 years now since the day Xi took office in China proclaiming his goal and ambition to "confront and overcome the US military" (his words) so that China could take its place as a global polar power able to do anything it wants including restoring illegal international claims on territories dating back hundreds of years and commanding maritime passage and control that obliterates the rights of other countries.
And then the Pandemic happened which really didn't alter the general exodus except that it masked what was happening for up to 2 years and might have accelerated the plans of some companies.
Some stability might help
I agree I think this is a great opportunity for Mexico and it’s happening and just like anything momentum, begets more momentum, and in this case investment, which would be one of the best ways to solving our immigration crisis, is if the country is doing really well people will probably stay down there.
When are you going to grow that epic beard?
The US and Mexico are the most
perfect fit. Come on Mexico!
Let’s be great together!
My Mach-E was built there.
I still have land in MEXICO THANKS to my great grandfather and Pancho Villa 🤠🤝🇲🇽 THE MAN WHO WORKS THE LAND OWNS THE LAND__ZAPATISTAS ... NO MYSTERY IN MY HISTORY ✊🏿
ESTO HACE VISIBLE EL FINAL DE LOS TRATADOS DE BUCARELLI DONDE ESTADOS UNIDOS FORZABA A MEXICO NO DESARROLLAR SU PROPIA TECNOLOGIA
One more thing 90% of all these Mexican and Vietnam manufacturers still get their products from china, They place made in Mexicao and Vietnam raise the price for American consumers. what bothers me is how so Americans are ignorant about global trade. over 50% of these new factories in Mexico are chinese owned. China just finished the maya rail project in Mexico on time.
Countries don't get rich from contract manufacturing or offshore manufacturing. The reason China is successful is because China is following the Japanese and South Korean example of developing indigenous tech and brands.
And where does a country get that knowledge to develop indigenous IP and products? India is an example of a country with unlimited potential that has achieved practically nothing due to its stubborn independence rejecting assistance and exchange of ideas. It's why the recent Biden gift to India of modern fanjet engine technology (which China doesn't even have) is so stunning and potentially momentous, possibly leading to future achievements and opportunities in everything related to aviation and beyond and is the kind of gift that can truly change a nation's course in history.
Because China has a reputation for transactional relationships and theft, China has never been given this kind of gift(at least recently. In the 1990's the US gifted China a small warship with advanced propulsion that today continues to sail as a Type 52 but although it's the basis for many of today's modern Chinese warships, the propulsion system remained uncopyable). This is why today China is actually a very backward country in most basic sciences and technologies. China does very well improving the use of technology but is very limited in a very large number of advanced and basic technologies that are common in the US and its allies.
This guy is in-accurate on so many things.. Especially on the political system of Mexico..
If he can't get Chinas currency right I shouldn't expect much
Be specific about your criticism. Politically, Mexico is undeniably a functioning multi-party democratic system where no single party party has ruled indefinitely. There are multiple levels of governing in a structure that is somewhat similar to the US. The tax system and and services provided is different than but structured generally similar to the US.
@@tonysu8860 "undeniably a fUnCtIoNiNg multi-party DeMoCrAtIc system" hahaha you must be white...
The major parties are PRI and PAN (in actually both are the same)..
PRI has govern Mexico for 70 years straight.. 70 years straight regardless if voted otherwise.. Plus 2 other presidents
PAN had 2 presidents but they were ruled behind the curtains by the PRI.
And here's the kicker that most foreigners won't know, the CIA had hired some of those Mexican presidents... Literally. The CIA has even said so.. They had Mexican presidents in their pocket.
So if you think, lol, 70years+ of one ruling party and having a foreign government owning the countries presidents is called "undeniably a functioning MULTI-PARTY democratic system" hahaha you must be white...
If you ever wonder why Mexico is behind in technology is thanks to USA.. Literally...!
Right after the Mexican-American war USA Not only stole Mexican land but made Mexico sign a corrupted contract saying Mexico couldn't develop technology for 100 years on their own land..
Also right after this war USA stole petroleum refineries from Mexico.
Trust me you and this doofus have no idea what you're talking about... Zero.
Things are looking different now because after 100 years we have a party Morena ... And you want to know why or how Morena come into power ??
This is so strange to say this, it's literally thanks to Trump. Regardless Trumps loud mouth his government never intervened with mexican politics.. Allowing Morena to take Mexico back from corruption of the PRI and PAN parties.
Mexico has been misdirected by corruption for decades and USA has had a huge hand in this.
Ever wonder how cartels get their money, military USA grade weapons, and ammo? Lol.. USA really loves creating chaos in others countries while brainwashing their own society as "heroes"
And you think that's a good thing, China will keep lending to the USA@@tonysu8860