It's a trade war being fought in the streets: Mexico's army of 1.6 million street vendors is resisting police attempts to confiscate imports from China, and the government has responded with everything from buy-Mexican ad campaigns to a special anti-import police squad.
China has displaced Mexico as the second-largest supplier of goods to the US market, leaving Mexicans with a sense of resentment and injustice. Bypassed long ago by Taiwan, Singapore and Japan, the country now fears it will be left behind by China as well.
Famed for its handicrafts, Mexico now imports everything from painted religious figurines of Mexican saints to leather sandals from China. And after pinning all its economic hopes on exporting to the US market, it finds itself outmaneuvered in low-wage manufacturing.
"It's not just fear, it's panic," said Mexico City historian Lorenzo Meyer. "We were supposed to be the ones moving ahead. We had free-market reforms, and now we're losing out to a communist-run country. In 500 years, this country has never been able to get ahead economically."
Newspapers regularly run stories on the threat. "The Chinese want Mexico's oil," "Chinese products proliferate in handicraft markets," and "Border factories fight Chinese threat" are just a few recent examples.
Angry textile and shoe workers have begun trashing Chinese goods in the streets. The government has started airing "Buy Mexican" ad campaigns, and police have rounded up Asian vendors and staged increasingly violent raids against street stalls selling contraband imports.
The anger isn't just over imported goods. Since 2000, Mexico has lost more than 200,000 maquiladora, or manufacture-for-export, jobs, with many factories moving to China.
The damage is everywhere. China is producing statuettes of Mexico's patron saint, the Virgin of Guadalupe. And plastic Chinese flip-flops are the preferred footwear in many parts of rural Mexico, replacing Mexican leather sandals that had been worn here for centuries.
In the north-central state of Guanajuato, dozens of shoe-making businesses have closed recently, including Botas Fox, the family business of President Vicente Fox. Shoemakers complain they are being driven out of business by cheap Chinese imports.
"We just can't compete with the labor costs," said Sandra Santamaria, project director for Mexico's Apparel Industry Chamber. "Labor in China costs US$0.48 per hour, and in Mexico it's US$1.20."
Mexico has imposed dumping duties of more than 500 percent on Chinese apparel, but that hasn't stemmed the influx. Many Chinese goods are smuggled in or imported under labels from other countries. Not including these clandestine goods, China currently runs a trade surplus with Mexico of more than US$5 billion.
Some Mexicans blame themselves. "We've never been able to defend ourselves against the Americans, or the Chinese," said one anti-import sign posted outside a Mexican clothing store. "But, then again, we haven't seen any Chinese. All we see are disloyal Mexicans who don't want to pay for Mexican goods."
Some take refuge in racism. Asian jokes and stereotypes are still common here, even in advertisements and billboards.
In one raid in Mexico City last month, police rounded up Koreans -- who allegedly run many of the import operations -- and deported 11 of them, drawing complaints of discrimination from the Korean community.