Train reaction

Chinese interest returns to Mexican infrastructure projects.

As Biden began to creep ahead in key states in the US Presidential election 2020, rumours were already swirling around the Mexican infrastructure set around an anticipated inflow of Chinese investment.

China has built a significant presence in Latin American, especially in Argentina, but has yet to gain a significant toehold in Mexico. China’s insatiable demand for commodities has driven a natural resource boom across most of South America.

According to a Red ALC-China report, China’s foreign direct investment in Argentina totalled USD 31 billion between 2005 and 2019 spanning oil and gas, mining, agribusiness, beef and fisheries. The equivalent number, for the whole of central America, was just USD 1 billion.

The Trump administration viewed growing Chinese influence in Mexico with mistrust and irritation. In contrast, Biden is expected to be more tolerant but as an executive at a Mexican infrastructure group explained, “It is not as if any American, Republican or Democrat, is going to be happy about growing Chinese influence in their backyard. Furthermore, there will be pressure to comply with the United States–Mexico–Canada Agreement (USMCA) and privilege existing commercial partners over new ones.”

“It’s not as if any American, Republican or Democrat, is going to be happy about growing Chinese influence in their backyard.”

Executive of a large infrastructure group, Mexico

Historically, Mexico aligned their geopolitical strategy with US growth and protectionism. The López Obrador (AMLO) administration has taken a different tack by seeking to expand markets and reduce dependence on the US. In line with this strategy, Foreign Secretary Marcelo Ebrard has worked hard to improve Chinese relations, especially during the pandemic.

A senior official at the Secretariat of Communication and Transportation (SCT) confirmed, “Practically from the beginning of the administration, a primary task has been to attract the interest of new business partners, we have focused on Asia, with special emphasis on China. The relationship is healthy and continuous, so it is possible that in 2021 we will see these commitments [the Mayan and Interoceanic train projects] materialise.”

“It is possible that in 2021 we will see these commitments [the Mayan and Interoceanic train projects] materialise.” 

Senior Official, Secretariat of Communication and Transportation, Mexico 

China’s previous attempts to access Latin America’s second largest market have left an embarrassing string of cancelled projects. With an AMLO government and Trump out of the White House, is now the time for China and Mexico?

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