A rising tide raises all boats. North and Central America will be an economic power house soon. A few regions just need to get more of their collective sh!t together.
Sad thing is that unlike China, Mexico did not and maybe also will not have local IP, brand and/or tech moats. People were laughing over Chinese auto, electronics and shanzhai products a decade ago. Yet today they have CATL, BYD, Huawei among others.
Median household disposable income in Mexico is around $9800 [0]
Median household disposable income in China is around $5,000 [1]
In reality, in Prefectures like Guangzhou, Shanghai, Beijing, and Tianjin you are seeing median household disposable incomes that are comparable to Mexico [2], hence why high value manufacturing is returning to MX, because Chinese high value manufacturers can't compete within the US with MX when factoring shipping costs.
Within Asia, Chinese high value manufacturing is still competitive, but is returning to Thailand and Malaysia for the same reason (all those consumer electronics factories in Guangzhou were started and managed by Malaysian Chinese in the 80s)
Depends on the industry. MX companies don't innovate much in the Telecom and Consumer Electronics space (too difficult to
compete with the US next door and China due to pricepoint and information transfer from Taiwan/SK/MY/JP to CN) but a lot of R&D in the Medical Electronics, AgTech, Energy, and Automotive industries is done within Mexico itself, though regulations make it so it's more efficient to do so while being a subsidiary of a foreign company instead.
Also, I've never heard of BYD or CATL til you mentioned em, but I don't follow the EV market (battery tech notwithstanding) nor do I really care, but it does show that there is still some work to be done in brand perception if a normie like me hasn't heard about it.
Mexico was the original China in the 80s and 90s. In fact, Mexico even hit the same economic and developmental metrics as China did today by the mid-2000s and even hit the same precipice to become a high income country (like China c.2022) in the 2003-2009 period.
But it began losing manufacturing to China due to cost pressures in the aftermath of China's WTO assenscion [0][1]. Then the Great Financial Crisis happened as well and Mexico saw a lost decade in the 2010s.
It's unsurprising that we're seeing manufacturing leave China now that incomes have reached around $400/month for skilled manufacturing [2][3][4], a similar amount that caused similar manufacturing to leave Mexico for China in the 2000s.
Thailand, Malaysia, Brazil, Russia, and Turkey all had similar stories as well in the 2000s-early 2010s. Poland. Hungary, Czechia, Slovakia, Croatia, and Romania almost faced the same issue as well but were lucky to be within the EU and neighboring Germany so pricing remained competitive.
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[ 3.4 ms ] story [ 43.2 ms ] threadMedian household disposable income in Mexico is around $9800 [0]
Median household disposable income in China is around $5,000 [1]
In reality, in Prefectures like Guangzhou, Shanghai, Beijing, and Tianjin you are seeing median household disposable incomes that are comparable to Mexico [2], hence why high value manufacturing is returning to MX, because Chinese high value manufacturers can't compete within the US with MX when factoring shipping costs.
Within Asia, Chinese high value manufacturing is still competitive, but is returning to Thailand and Malaysia for the same reason (all those consumer electronics factories in Guangzhou were started and managed by Malaysian Chinese in the 80s)
[0] - https://www.inegi.org.mx/temas/ingresoshog/
[1] - http://www.stats.gov.cn/english/PressRelease/202201/t2022011...
[2] - http://www.stats.gov.cn/english/PressRelease/202202/t2022022...
Also, I've never heard of BYD or CATL til you mentioned em, but I don't follow the EV market (battery tech notwithstanding) nor do I really care, but it does show that there is still some work to be done in brand perception if a normie like me hasn't heard about it.
Mexico's population ~130M, China's 1.3 billion.
But it began losing manufacturing to China due to cost pressures in the aftermath of China's WTO assenscion [0][1]. Then the Great Financial Crisis happened as well and Mexico saw a lost decade in the 2010s.
It's unsurprising that we're seeing manufacturing leave China now that incomes have reached around $400/month for skilled manufacturing [2][3][4], a similar amount that caused similar manufacturing to leave Mexico for China in the 2000s.
Thailand, Malaysia, Brazil, Russia, and Turkey all had similar stories as well in the 2000s-early 2010s. Poland. Hungary, Czechia, Slovakia, Croatia, and Romania almost faced the same issue as well but were lucky to be within the EU and neighboring Germany so pricing remained competitive.
[0] - https://www.voanews.com/a/a-13-a-2003-11-12-33-mexico-s-6729...
[1] - http://international-economy.com/TIE_Sp03_Rosen.pdf
[2] - https://www.inegi.org.mx/temas/ingresoshog/
[3] - http://www.stats.gov.cn/english/PressRelease/202201/t2022011...
[4] - http://www.stats.gov.cn/english/PressRelease/202202/t2022022...