Mexico and China, A Growing Financial Friendship

A trade specialist asserts Mexico has much to offer to Asia. A blossoming and necessary trade relationship between Mexico and China involves several benefits for both countries, which include exchange of a large variety of products and extensive markets where the two nations have found success in selling their goods.

Due to its advantageous geographic position that puts it next to the United States and nearly at the center of the Americas, Mexico is one of the main receivers of goods in Latin America, according to the country’s National Institute of Statistics and Geography (INEGI). The Mexican news agency Notimex adds that during the final three quarters of 2008 exports from China to Latin America grew to 111.5 billion usd, with Mexico, Brazil and Chile being its three main business partners.

The same source said China is Mexico’s second biggest trade partner. In 2008, Mexico imported nearly 35 billion usd in Chinese products, more than the rest of Latin America altogether. At the same time, the country exported more than 2 billion usd worth of products.

In the last few years, Mexico has diversified its imports from China. This is not a surprise. Mexico has become one of the main manufacturing centers in the Americas and it has included Chinese companies in different high value sectors like electronics or Information Technology. These sectors have been established in the country with one objective in mind: to meet the growing demand of North and Latin American markets.

As a result, Mexico is buying raw materials for traditional sectors. For example, Mexico’s shoe industry imports large volumes of synthetic soles from China. Mexico is also buying more electronics, computers, automobile accessories and toy parts to meet the needs of a growing specialized industry.

The Mexican product most in demand in China is beer. But Mexico has much more to offer the Asian country, said Martino Liu Jr., head of business development for the Mexican company Outsourcing & Trade Magnum (OTM).

Since 2004, OTM, with offices in Guadalajara, Mexico City and Beijing, China, has dedicated itself to the purchase of Mexican and Chinese products for their export and import through its predecessor, Orbicargo, an international cargo and logistics agency born in 1994. Both were funded by their founder, Martino Liu Chow, Liu Jr.’s father.

Orbicargo was born from an unprecedented vision of the future. “The company’s objective was to offer consulting services to Mexican firms so they could begin trade relationships with China,” Liu Jr. said.

OTM emerged after its predecessor was well established and its founder moved to Beijing. It buys products from both countries and sends them at the request of their clients.

Contrary to what one might think, the exchange of goods is easy. Mexico and China have signed one treaty that offers preferred interest rates to import and export loans and another that avoids double payment of taxes in both countries.

“My father’s life has been chameleonic, from when I was a child until today. Every day he speaks English, Chinese and Spanish,” Liu Jr. said.

Martino Liu Chow (whose proper Chinese name is Shin Jen Liu Chow) was born in the 1950s and was raised in Taiwan. During his adolescence he moved to Italy, where he went to high school and rechristened himself with his Latin name. In Spain, he completed a bachelor’s degree in liberal arts and then in Canada he studied business. There he got to know Mercedes, the Mexican woman who would later become his wife. In 1981, the family moved to Mexico. Martino Liu Chow worked for a trading company. Later, he founded a plastics factory, which he closed in 1994.

After traveling so much from continent to continent and through his firsthand experience, Martino Liu Chow knows very well what China and Mexico need from each other. “We have sent containers with several tons of processed juice; two (40 ton) containers with giant squid that have been so successful we are sending a third; soap for restrooms; and samples of whole-grain cookies,” said Liu Jr.

It should also be added to the mix the fact that China and Mexico are excellent trade partners. An example: in the Asian country they favor eating organic foods and healthy products. Mexico has centuries of experience in the production of these goods.

The Chinese and Mexican economies complement each other. Each one has much of what the other needs and that is the foundation of a solid trade relationship that has yet to say everything it needs to

Source: Promexico,

Negocios, Mexico and China, A Growing Financial Friendship