RENEWING Trade & Policy Relations CHINA (CN) & MEXICO (MX)

INTERNATIONAL PUBLIC MANAGEMENT

LUJAN ANAYA, Raul ALEX (52915639)

Historical Background

MANILA GALLEON, 17-18th Centuries: People, goods and news TRAVELLING from Acapulco, MX to Manila, PH (Spanish Empire era) and other territories: Shanghai, Malacca, Macau, Japan…

19-20th Centuries, times of political transitions in both CN and MX: IRREGULAR TRADE & MIGRATION patterns to DA LUSONG:

1980-90’s: ECONOMIC LIBERALIZATION in both CN and MX, facilitated quicker development of BILATERAL relations;

2000’s, more dynamic ECONOMIC and DIPLOMATIC relations: WTO, APEC and other Economic Forums, Foreign Trade, Chambers of Commerce, Academic Exchange and Interest…

Context of Relations

NEWLY INDUSTRIALIZED COUNTRIES (NICs);

CN is 2nd WORLD ECONOMIC POWER, leader of BRICS bloc; while MX is 2nd REGIONAL ECONOMIC POWER (Latin America);

By 2020-25: CN will engage in TIGHTER COMPETITION for primacy, MX will rise among TOP TEN ECONOMIES of the planet; [OECD]

MEMBERSHIPS in Major Organizations: G-20, WTO, APEC…

SIMILARITIES: Traditions, Social Values, Leadership, Patterns; and CHALLENGES: Legal, Political, Social, Economic…

Situation: A Complex Relationship

CONTROVERSIAL relations, FRIENDLY in diplomacy but RIVALS in trade: costs of goods & services, labor force for foreign investors;

HISTORY OF DISPUTES: CN access to WTO, customs barriers, allegations of disloyal competition, assymetry in conditions;

CN is second provider of goods to MX… But there is LACK OF PRESENCE in CN;

Last 5 YEARS AS CRUCIAL to tighten ties: seize opportunity for harmonizing relations and promote WIN-WIN context;

Specialists point to LACK OF STRATEGY: Are MX policy-makers being CLUELESS?...

Lack of Strategy? Cluelessness?

By 2011-12 relations between MX and CN were AT THEIR LOWEST EBB EVER, BOTH IN TRADE & DIPLOMACY… Precisely during CHINA’S MOMENTUM FOR INVESTING in LAT-AM! Brazil, Uruguay, Costa Rica, Bahamas, etc.;

VERY LIMITED INVESTMENT exchange so far between MX and CN; plus 2 recent cases of controversy:

DRAGON MART CASE (2011-12), Corporation was to settle in Cancun Beach to initiate construction of commercial complex, with interest of several CN companies… But bringing legal issues: environment, labor, administrative, anti-trust;

ISSUE OF “FREE TIBET” (2011) Felipe H. Calderon has deliberately brought up issue of Tibet Independence in international media and openly support the cause (despite advice given by his own advisors), causing political dissappointment of CN government and causing damage to political relations…

The Controversies 2011-12

What about Tibet?...

[FACEPALM] Talk to my hand!Hypocrisy or Cluelessness?

Interest of 4,500 CN companies In area of +55,000 sq.m

The New Approach

NEW ADMINISTRATION IN MX, headed by Enrique Peña Nieto of the IRP (2012-13), has publicly shown INTEREST IN REBUILDING TRADE ties, while strengthening policy-transfer relations too… Not only with CN, extending also to other SOUTHEAST ASIAN COUNTRIES;

SEIZE THE OPPORTUNITY, given recent SHIFT OF POWER in CN: arrival of Xi Jinping to Zhongnanhai, and changes to the Politburó of the CPC in Beijing… No time to lose!;

April 2013: STATE VISIT of President Peña TO CHINA and HONG KONG(official meeting with CY Leung and Business people) heading to BOAO Forum in Hainan, and LATER TO JAPAN;

Seek to introduce MX as strategic partner, by promoting DIRECT INVESTMENT and forex portfolio to strengthen economy and MX currency, as well as doing deeper efforts to provide a SAFER ENVIRONMENT and offer more FLEXIBLE LEGAL & FISCAL FRAMEWORK to investors…

Visit of MX President to HK & CN

Mexican President Enrique Pena Nieto in Hong Kong in bid to boost China trade [SCMP 05-04-13]Pena Nieto adamant Mexico must enhance alliances with Hong Kong and mainland

HK: Gate of Trade with China

BOAO Forum

State Visit to CN

Highlights of Trip through Asia

“China’s Experience Worth Learning”: ECONOMIC GROWTH AS LESSON FOR DEVELOPING NATIONS; [ChinaDaily, 07-04-13]

“SOUND FOUNDATION… TO STRENGTHEN BILATERAL PARTNERSHIP (and deepen trust between both Nations)”; [PRC ForeignAffairs]

Both countries to REVIEW CONSULAR PROCEDURES and them more agile, to attract mutual tourism and business activity;

“MEXICAN WAGES FALL BELOW…”: Seek to penetrate regional markets, as labor costs in MX 19.6% lower than in CN); [Y!News, 05-04-13]

Make MX STATE OIL COMPANY MORE COMPETITIVE (enhance Joint Ventures) and EXPORT MORE OIL in order to narrow trade imbalance;

STRENGTHEN MX CURRENCY: investors’ appetite for risk, and Bank of Japan has eased conditions to grant credit; [WSJ, 11-04-13]

MX to be AGENT OF CHANGE in International Policy agenda…

Common Lessons for Policy Transfer

POLICY FIELDS & KEY OPPORTUNITY AREAS:

IN MX: Education & Sci-Tech Development; Supply Chains; Public-Private Partnerships; Financial Cooperation; Domestic (and regional) Security; Tax & Administrative Reform;

IN CN: Sustainable Development in Urban Areas, Social Welfare for reducing poverty, Agricultural Productivity;

NARROW WEALTH GAP: Gini Index (0.47-0.48), EXPAND MIDDLE CLASS; [CIA World Factbook]

Enhance CULTURAL & EDUCATION EXCHANGE;

“LAT-ASIA INDUSTRIAL ENGINE… could replace the West’s sputtering motor” [EM, 15-03-13]

NOTE: Mind “Guanxi” and “Conectes”!

CN and MX share the notion of CULTIVATING “CONNECTIONS” and CONSTRUCT PUBLIC REPUTATION as means to boost career and achieve success (in public & private sectors)… and CUT THROUGH THE “RED TAPE”;

Oriental tradition of SAVING FACE (MIANZI) vs. Roman concept of KEEP REPUTATION (FAMA);

CONTEXTUAL ISSUES: In CN, big and COMPLEX political apparatus, vast professional networks (business sector)… In MX CENTRALIST administrative systems, top-level decision circles remain small, elitist and discriminatory;

TANGLING CORRUPTION as issue, considering need of keeping clean image in matter of politics and improving conditions at top-level decision-making…

As Conclusion…

Both countries share RICH HISTORY in trade (& policy) relations, culture, and valuable potential to INTERACT AS PARTNERS;

BEST TIME TO REVIVE TIES despite past controversies and disputes;

START BY BUILDING STRONGER PRESENCE OF MX: HK is gateway for trade interaction with CN and other EAST ASIAN STATES;

SIGN TRADE AGREEMENTS, within next 5-10 years: MX needs to LEVEL ITS TRADE BALANCE (less imports, more exports)…

[New Pacific Route: Hong Kong - Manzanillo]

HONG KONG

MANZANILLO

THANK YOU! MAPPM 2013