Baker Botts Fellow in Energy and Environmental Regulatory Affairs | CES Lead, Energy and Geopolitics in Eurasia
Gabriel Collins, Tony Payan, and David A. Gantz, “Quantifying Investments in Mexico by China-Linked Entities,” Rice University’s Baker Institute for Public Policy, January 30, 2025, https://doi.org/10.25613/RRV4-8046.
In a world of increasingly fragmented globalization, access to premier markets on preferential economic terms will be a core strategic priority for export-oriented industrial countries. The People’s Republic of China hosts by far the largest collection of manufacturing capacity anywhere in the world and this multitrillion dollar factory floor faces a three-way choice as domestic consumption stagnates in China: (1) export into an increasingly protectionist world where goods will face steeper tariffs, (2) shutter facilities and lay off workers, or (3) find economic permissive portals where manufacturing and final assembly capacity can be reconstituted offshore behind tariff walls and thus enjoy preferred market access.
China’s growing manufacturing investments into Mexico, which are likely 7-to-10 times larger than officially published totals, squarely represent that third option. This Working Paper introduces preliminary findings from our research team’s industrial census across Mexico that has identified more than 200 discrete PRC-linked manufacturing and infrastructure investments worth an estimated $15 billion and potential future investments that could more than double that capital stock in short order.
PRC-linked assets in Mexico cluster tend to cluster in the states with the tightest commercial and logistical linkages to the United States. Nuevo Leon stands out. In addition to ties with the US, these states–Coahuila, Guanajuato, Nuevo León, Querétaro, and San Luis Potosí–also host Mexico’s most competitive industrial and manufacturing clusters. These are also typically the places with the best access to road and rail linkages and low-cost inputs from the resource-abundant United States, in particular, natural gas.
View the full paper (PDF) and dataset (beta version).
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