Chinese Investments in Infrastructure in Mexico
Recently, the Red Académica de América Latina y el Caribe sobre China published the CHINESE INFRASTRUCTURE MONITOR IN LATIN AMERICA AND THE CARIBBEAN 2023 (trilingual edition: English, Spanish, and Chinese), which is its annual report on Chinese investment in infrastructure in the region. These results are of great importance for those interested in the relationship between LAC and China.
One outstanding data is that, during 2020-2022, Mexico became the primary recipient of Chinese infrastructure projects in Latin America and the Caribbean, reaching nine projects in 2022. These projects include the construction of railways in the south of the country, and it should be noted that in addition to the investment, there has been an exciting transfer of technology.
In addition, another RED report published last April mentions that Foreign Direct Investment (FDI) of Chinese origin to Mexico in 2022 amounted to 2.52 billion dollars, exceeding the 1.7 billion dollars reported in 2021.
As for the immediate future, everything indicates that Chinese investment in infrastructure in Mexico will continue through 2023. A recent example is the agreement signed in July between the government of Yucatán and the Chinese company Power International Development Limited (CPID) to promote green energy generation. CPID is a subsidiary of the Chinese state-owned company State Power Investment Corporation (SPIC). This company in 2020 bought Zuma Energía, then the most prominent independent renewable energy company in Mexico.
In this context, the United States is also expected to invest in clean energy generation in southern Mexico to offset Chinese investments in the region and seek to mitigate irregular migration. From the US perspective, the development of the southern states of Mexico, combined with further integration with the Northern Triangle of Central America (Guatemala, Honduras, and El Salvador), is one way to address the root causes of the Irregular migration of Mexicans and Central Americans to the United States. In this regard, the President of Mexico has declared that within the framework of the development of industrial parks in the Interoceanic Corridor of the Isthmus of Tehuantepec, temporary work visas (for up to one year) will be granted to Central American citizens. If Mexico improves its integration with the Northern Triangle countries, it would considerably increase the attractiveness of investment in the region. We'll see if it materializes.