China Big Investment in Mexico: The Cold War and trade war has been going on for a long time between the two superpowers of the world, America and China. Both the countries have been clashing indirectly on different occasions now and then. Both countries are engaged in efforts to win countries around the world in their court to fulfill their commercial objectives. There is currently a tussle between the two countries on the issue of Taiwan and Ukraine war.
Meanwhile, China has resorted to America’s enemy country to capture the American market. Renowned Chinese furniture companies have invested billions of rupees in Mexico, adjacent to the US, so that they can deliver their furniture, especially sofas, to the homes of Americans with low expenses and low transportation costs. Mexico and the US have had a centuries-old rivalry and border dispute.
Worried about shipping difficulties and geopolitical troubles, Chinese exporters are setting up factories in Mexico to boost and maintain their sales in the United States, reports the NYT.
Chinese industrialist Bill Chan has suddenly decided to set up his own $300 million factory Man Wow Furniture Manufacturing in the country’s isolated northern state of Nuevo León, despite never having set foot in Mexico, according to reports. Man Wah is one of the largest furniture companies in China. It had already planned to set up its production centers in Mexico near the US side of the North Pacific Ocean in January 2022.
This move will also allow Chinese traders to avoid the huge cost of the North American trade deal as Chinese goods made in Mexico will be able to reach the US markets duty free after being labeled Made in Mexico. America has been a big market for Chinese sofas.
Chinese manufacturers’ interest in Mexico is part of a wider trend known as nearshoring. In this arrangement, international companies move production centers closer to the market to limit their exposure to shipping problems and geopolitical tensions.
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