Nuevo León, in northeastern Mexico, borders the U.S. state of Texas and is renowned for its capital, Monterrey.
Monterrey, known as the "Queen of the North," is celebrated not only for its rich history and culture but also for its significant economic contributions as Mexico's most Americanized city.
Although Monterrey comprises only 4% of Mexico's population, it accounts for 10% of the national economic output.
As an important industrial and commercial hub, Monterrey attracts many Mexican companies and multinational corporations.
It is also set to be one of the host cities for the 2026 World Cup.
In recent years, with the restructuring of global supply chains and the rise of nearshoring, more and more Chinese companies have been eyeing Mexico.
Since 2021, numerous Chinese entrepreneurs have visited Mexico annually, exploring opportunities in various sectors such as automotive, e-commerce, chip manufacturing, and machinery.
According to data from the Mexican Ministry of Economy, China has become Mexico's fourth-largest source of foreign direct investment from January to March this year.
After Tesla established a factory in Monterrey, many of its suppliers, numerous of which are Chinese companies, also bought land and set up factories in the region.
Besides the automotive and new energy industries, home appliance and furniture companies have long established a presence in Monterrey.
The Mexican presidential election has garnered significant attention amidst this investment frenzy, as new government policies will influence corporate investment strategies.
Mexico's industrial development has deep roots. As early as 1925, Ford assembled Model T cars in Mexico City.
In the 1930s, General Motors and Chrysler set up assembly plants in Mexico, and by 1960, several international companies were manufacturing vehicles there.
The North American Free Trade Agreement (NAFTA) and its successor, the United States-Mexico-Canada Agreement (USMCA), further propelled Mexico's industrial growth, particularly in the automotive sector.
Mexico graduates more engineers and technicians annually than any other country in Latin America, providing robust talent support for various industries.
Monterrey Institute of Technology and Higher Education ranked third in Latin America in the 2023 QS World University Rankings and outranked many well-known Chinese and American universities globally.
However, Mexico's labor market development is uneven.
While the northern region attracts many young talents, other areas lag behind.
Mexico's industrial base, geographical proximity to the United States, and zero-tariff benefits make it an ideal investment destination for Chinese companies.
Nevertheless, Mexico faces challenges such as power shortages, infrastructure deficits, and water scarcity.
In May this year, a major blackout in northern Mexico exposed the fragility of the power supply.
Chinese companies' investments in Mexico focus on manufacturing sectors like electronics, automotive, and household appliances, contrasting with their investments in raw materials and infrastructure in other South American countries.
Despite weak infrastructure and security concerns troubling some investors, Mexico's economic potential and market opportunities continue to attract many Chinese enterprises.
Monterrey's industrial parks, such as Hofusan Industrial Park, have drawn numerous Chinese companies.
These firms not only enjoy zero-tariff benefits but also leverage Monterrey's logistical advantages to reduce transportation costs.
However, the limited local production scale of components and the high cost of importing parts pose challenges for companies establishing local supply chains.
Companies like Man Wah Holdings, Midea, and Hisense have already set up factories in Mexico, and telecommunications giants like Huawei and ZTE have large-scale operations in the country.
For these companies, Mexico offers a good opportunity to maintain their presence in the North American market amid the U.S.-China trade war and geopolitical tensions.
The Mexican election results revealed Claudia Sheinbaum as the country's first female president.
She promises to continue increasing infrastructure investment, build 100 industrial parks, and improve the transportation network.
This will provide businesses with more convenient logistics and transportation options.
Sheinbaum also plans to shift some investment opportunities to southern Mexico to promote local development.
However, the geographical and economic advantages of the northern region remain undeniable.
For Chinese companies, future investments in Mexico will face new opportunities and challenges.
Mexico, particularly Monterrey, is becoming a global investment hotspot.
Amid global supply chain restructuring and geopolitical shifts, Mexico's geographical advantages, economic policies, and abundant labor resources attract many Chinese enterprises.
Despite challenges such as infrastructure and security issues, Mexico's economic development potential and market opportunities are substantial.
For Chinese companies, seizing the investment opportunities in Mexico will help them stay competitive in the global market.
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