The comfortable chairs and plush leather sofas from the production line at the ‘Man Wow Furniture Factory’ in Monterrey, Mexico, are 100% ‘Made in Mexico. All these items will be bought by major retailers like Costco and Wal-Mart in the US, but interestingly, it is a Chinese company, and its manufacturing plant in Mexico was built with Chinese capital. This triangular relationship between the US, China, and Mexico is behind the flourishing Chinese business in Mexico.
It is the reason why the term ‘near-shoring’ is currently gaining popularity in the Mexican market. Manwah is one of hundreds of Chinese companies that have recently moved to industrial areas in northern Mexico to bring production closer to the U.S. market.
However, along with the savings, their end products are considered entirely Mexican, which means Chinese companies can avoid U.S. tariffs and sanctions on Chinese products during the ongoing trade war between the two countries.
The company’s general manager, Yu Ken Wee, gave a tour of the site. UKNV says its move to Mexico will provide the company with better regional economic and transportation opportunities.
We hope to triple or quadruple production here,’ said Yu Can Wee in a Spanish accent. He added, ‘ Here in Mexico, we intend to bring our work to the same extent as in Vietnam. This Chinese company had a location in Monterrey, Mexico, in 2022, but their 450 employees were already working here.
UKNV says they hope to increase the size of the plant in the coming years, which will take their number of employees to more than 1,200. People in Mexico are very hardworking and quick to learn and master,” says Yu.
We have good operators, and their productivity is high, so in terms of labor, I think Mexico is strategically excellent,” he added. Indeed, the increase in the number of employees and job opportunities in the company is considered an essential step in the Mexican economy.
Mexico’s total exports to June last year rose 5.8 percent to $52.9 billion (£42.4 billion) from a year earlier. Mexico’s growing trade with the United States has also emerged as another critical aspect of job creation and unemployment relief. Sometimes, after moving production from factories in Asia, U.S. companies also provide facilities in Mexico. Perhaps the announcement was made by Elon Musk last year when he unveiled plans for a new Tesla Gigafactory outside of Monterey.
However, the electric car maker must still lay the foundation for the $10 billion plant.
While Tesla is still committed to the project, it has slowed its plans amid concerns about the global economy and recent job cuts at the automaker.
However, regarding Chinese investment, some advise Mexico to be wary of being drawn into the broader geopolitical conflict between the United States and China. But whether it’s a back door for the US or part of a costly war between the superpowers, it’s essential and beneficial to Mexico in these difficult times of global trade.
