Trump’s U.S. jobs push may open doors to China in Mexico: ICBC bank

By Anthony Esposito, Dan Freed and Noe Torres | ACAPULCO, Mexico Fri Mar 24, 2017 | 8:15pm EDT

U.S. President Donald Trump’s push to force U.S. industry to bring jobs home is opening investment avenues for Chinese companies in Mexico, an executive with Industrial and Commercial Bank of China (ICBC), the country’s largest lender, said on Friday.

Fears of a hit to foreign investment ran high when Ford Motor Co (F.N) canceled a $1.6 billion plant in Mexico’s central state of San Luis Potosi in January.

Trump, who had railed against U.S. manufacturers investing in Mexico, hailed the decision as a major victory, but Ford put it down to declining demand for small cars.

Yaogang Chen, head of ICBC’s (601398.SS)(1398.HK) Mexico unit, said U.S. industry’s loss could be China’s gain.

“If some U.S. investment projects don’t (happen), there has to be somebody to invest. … If Chinese companies think it is profitable, they will invest,” he said in an interview on the sidelines of a banking conference in the resort of Acapulco.

In February, China’s Anhui Jianghuai Automobile Group Co Ltd (JAC Motor) (600418.SS) and Mexico’s Giant Motors, along with distributor Chori Co Ltd (8014.T), said they would invest over $210 million in an existing plant to build SUVs in the central state of Hidalgo.

Prior to Trump’s campaign against U.S. manufacturers shipping jobs overseas, Chinese companies were making tentative inroads into Mexico.

China’s BAIC Motor Corp Ltd (1958.HK) in June 2016 started selling in Mexico its own cars imported from China and has said that it will look into building an industrial plant in Mexico to produce cars and electric vehicles.

BAIC is already a client of ICBC’s in Mexico.

ICBC, one of the world’s top banks by market capitalization and assets, received its banking license in Mexico in 2014 and started operations there in mid-2016.

“JAC, we think, will be a client of ours in Mexico too,” Chen said.

Still, Chinese foreign direct investment in Mexico is a tiny fraction of what U.S. firms have plowed in over the years.

State-controlled ICBC expects to grow its assets and loan portfolio in Mexico tenfold over the next three years to some 10 billion pesos ($533 million), Chen said.

The executive said ICBC aims to offer a service to allow clients to convert Mexican pesos to Chinese renminbi and vice versa, and make cross-border transactions cheaper.

(Reporting by Anthony Esposito, Dan Freed and Noe Torres; Editing by Richard Chang)

Source: Reuters “Trump’s U.S. jobs push may open doors to China in Mexico: ICBC bank”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views


One Comment on “Trump’s U.S. jobs push may open doors to China in Mexico: ICBC bank”

  1. Steve says:

    Globalisation and Free Trade is the only way for global recovery as opposed to Protectionism trade policies. Our earth world is not in a depressive state as in the 1930s where countries imposed tariffs, import quotas and exchange controls to restrict spending on foreign goods.

    If President Trump imposed a strict protectionism policy, the US economy will suffer from a lacklustre rebound in trade and in a worst case scenario, a sharp contraction in US trade. The US no longer hold the trump card and dictate to the world of American prowess and hegemonic leadership. The scoundrels are in deep water with a 20 trillion $$ debt.

    Economically, China is extremely rich and politically wise making huge investments in countries like Mexico, LatAm countries and Asia. The US will be buying goods made in China produced in those respective countries due to cheaper cost in labour, expertise and transportation.

    Briefly, American Apprentice Trump will be handing the primacy in LatAm to China. In a report, bilateral trade between China and LatAm grew by 2,400% during the reckless Obama period and China now plans greater expansion in the Trump era of protectionism trade policies. China has inserted itself into key infrastructures in LatAm and has helped in poverty reduction worldwide including Africa.

    Again, China is taking the world by storm in all areas such as commodities, defence products including warships, fighter jets, energy, high speed railways, transportation and infrastructures, whilst the US is receding from it’s Uncle Sam hegemonic leadership.

    The world should now look into Uncle Han’s peaceful rise, economic leadership on global power
    and political governance in Socialism.