US President Donald Trump’s push to force US firms to bring jobs home is opening investment avenues for Chinese companies in Mexico, an executive with the Industrial and Commercial Bank of China Ltd (ICBC, 中國工商銀行), the country’s largest lender, said on Friday.
Fears of a hit to foreign investment ran high when Ford Motor Co canceled a US$1.6 billion plant in Mexico’s central state of San Luis Potosi in January.
Trump, who had railed against US manufacturers investing in Mexico, hailed the decision as a major victory, but Ford put it down to declining demand for small cars.
US industry’s loss could be China’s gain, ICBC’s Mexico unit head Chen Yaogang (陳耀剛) said.
“If some US 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, Mexico.
Last month, China’s Anhui Jianghuai Automobile Group Co Ltd (JAC Motor, 安徽江淮汽車) and Mexico’s Giant Motors Latinoamerica, along with distributor Chori Co Ltd, said they would invest more than US$210 million in an existing plant to build sports utility vehicles in the central state of Hidalgo.
Prior to Trump’s campaign against US manufacturers shipping jobs overseas, Chinese companies were making tentative inroads into Mexico.
China’s BAIC Motor Corp Ltd (北京汽車) in June last year 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 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 the middle of last year.
“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 US firms have plowed in over the years.
State-controlled ICBC expects to grow its assets and loan portfolio in Mexico 10-fold over the next three years to about 10 billion pesos (US$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.
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