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Mexico says in talks with China to form infrastructure fund

BY RODRIGO CAMPOS | Reuters
NEW YORK Tue Feb 11, 2014 7:49pm EST

Feb 11 (Reuters) - Mexico and China are discussing creating a joint fund for investments in infrastructure projects in Latin America's No.2 economy, Mexican deputy finance minister Fernando Aportela said on Tuesday during a visit to New York.

Mexican President Enrique Pena Nieto last year announced his government expected to see more than $300 billion in public and private spending on infrastructure in Mexico between 2013 and 2018, around a third of it in telecoms and transport.

The forecast spending was aimed at complementing a wider economic reform drive spanning energy to telecoms that Pena Nieto pushed through Congress last year and which is aimed at boosting long-lagging economic growth.

Mexican newspaper Excelsior said on Tuesday Mexico and China were negotiating creating a $2.5 billion fund for infrastructure spending, but gave no sourcing.

Aportela told Reuters the size of the fund was still being negotiated.

Beyond investments by state-run energy and water companies, Pena Nieto's infrastructure drive unveiled in July included putting two new satellites into orbit, tendering two new national television networks and building 15 new highways.

A broad range of Mexican companies will likely benefit.

Mexican billionaire Carlos Slim's conglomerate Grupo Carso , miner Grupo Mexico, cement giant Cemex, chemical producer Mexichem and airport operators Gap, OMA and Asur are all potential winners.



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I would be happy if they just patched the potholes and replaced burnt out streetlights

The Chinese are coming... The Chinese are coming...!!!

I wonder if they will put the deep water port in Colonet back on the agenda?

The Wallmart Super Highway from China to USA

China is looking to invest in Mexico right now as are many European nations as well. Moody's just upgraded Mexico to A grade credit rating and the recent financial, political and energy reforms have now brought further focus on Mexico.

We have had several visits from Chinese business representatives as well as government officials. They all tell us that Mexico will be the fastest growing economy in Latin America for the rest of the decade and they are just looking to get a return on their investment.

Not Baja but it will be very interesting to see how the money, if it materializes, manifests itself over here on the mainland.

Like anywhere, there are many layers between the input and output modes. There are huge infrastructure needs here that would not be so difficult to address with simple engineering.

In my town alone there is a brand new sewage treatment plant (well, a couple of years old) sitting across the highway.
The plumbing to hook it up has been stacked on the ground for a long time. It looks good but in needs to be undergrounded.

Of course, a couple of lift stations to make sh!t roll uphill are needed but those aren't even remotely new technology.

There are many towns here that could use basic sewage treatment..... they have exceeded their capacity for septic treatment. Then all these estuaries could get back to a natural flushing state rather than toilet based.

The smell of shit in the surf lineup can be awful and in rainy season it is phenomenal.

However, sewage isn't nearly as glamorous as high speed rail.

Following this story on the news cycles revealed that the total planned investment in infrastructure over the next 5 years involves much more than rail, Highways, roads, airports, power, water, drainage and telecommunications.

I wonder if this is why the President of the United States and Prime Minister of Canada are visiting Mexico starting Monday the 17th after 2 years of not meeting?

Originally Posted by CDN_JOHNNY

I wonder if this is why the President of the United States and Prime Minister of Canada are visiting Mexico starting Monday the 17th after 2 years of not meeting?

Money talks...

Originally Posted by CDN_JOHNNY

I wonder if this is why the President of the United States and Prime Minister of Canada are visiting Mexico starting Monday the 17th after 2 years of not meeting?

That can't be good for any of us........

Originally Posted by CDN_JOHNNY

I wonder if this is why the President of the United States and Prime Minister of Canada are visiting Mexico starting Monday the 17th after 2 years of not meeting?

President Obama is going to help Peña talk to Harper to get him to repeal the visa requirements Mexican citizens have to go through to vacation in Canada since 2009.

While improving infrastructure is a very welcome development, I have to wonder if strings will be attached. As it is now, the U.S. has very little leverage with China over issues like human rights because it is so heavily indebted to them.

Risking taking this sort of off topic I must say.

In my opinion when the "Three Amigos" signed the "NAFTA" agreement it was a good thing for North America.
It was extremely good for me, my business took off and allowed for substantial growth. We were into Industrial Automation.

Anyhow, I believe that industry did not allow NAFTA to naturally mature.
Industry started going global before NAFTA and it's growth potential for United States and Canada could take hold.
I firmly believe that if was allowed NAFTA to mature the three "North American" countries would be in a fairly level financial situation, industrially and would have been the financial power houses that China is now. (ignoring the financial crisis in the USA).

Anyhow, that did not happen and the only thing that can cut the "potential strings attached" situation is the three start helping each other more and start focusing on our own growth.
All though maybe it is too late.

As pauldavidmena said; "I have to wonder if strings will be attached".
No need to wonder.
"Money makes the world go around" and we all know who has most of that.

Gosh I feel better that I got that off my chest.

Billionaire Fredriksen Forms $1.8 Billion Mexico Rig Venture

Billionaire Fredriksen Forms $1.8 Billion Mexico Rig Venture - Bloomberg

Originally Posted by Woooosh

Billionaire Fredriksen Forms $1.8 Billion Mexico Rig Venture

Billionaire Fredriksen Forms $1.8 Billion Mexico Rig Venture - Bloomberg

Well that report drove the stock up almost 5%.

Mexico to trump Japan as No. 2 car exporter to US

By ADRIANA GOMEZ LICON | ASSOCIATED PRESS
published Saturday, February 22, 2014

CELAYA, Mexico — Mexico is on track to become the United States' No. 1 source of imported cars by the end of next year, overtaking Japan and Canada in a manufacturing boom that's turning the auto industry into a bigger source of dollars than money sent home by migrants.

The boom is raising hopes that Mexico can create enough new jobs to pull millions out of poverty as northbound migration slows sharply, but critics caution that most of the new car jobs are low-skill and pay too little. Mexico's low and stagnant wages have kept the poverty rate between 40 and 50 percent since the passage of the North American Free Trade Agreement two decades ago.

An $800 million Honda plant that opened Friday in the central state of Guanajuato will produce more than 200,000 Fit hatchbacks and compact sport-utility vehicles a year, helping push total Mexican car exports to the U.S. to 1.7 million in 2014, roughly 200,000 more than Japan, consulting firm IHS Automotive says. And with another big plant starting next week, Mexico is expected to surpass Canada for the top spot by the end of 2015.

"It's a safe bet," said Eduardo Solis, president of the Mexican Automotive Industry Association. "Mexico is now one of the major global players in car manufacturing."

When NAFTA was signed two decades ago, Mexico produced 6 percent of the cars built in North America. It now provides 19 percent. Total Mexican car production has risen 39 percent from 2007, to nearly 3 million cars a year. The total value of Mexico's car exports surged from $40 billion to $70.6 billion over that span.

"I congratulate Honda for its having confidence in Mexico, for having total confidence in the development of our country," said Mexican President Enrique Pena Nieto, who attended the opening of the plant in the town of Celaya along with Honda CEO Takanobu Ito. "They're contributing to two basic objectives, generating wealth and creating jobs in this country."

Manufacturing in Mexico is now cheaper than in many places in China, though the vast majority of the cars and trucks made in North America are still produced in the U.S. for domestic consumption and export to other countries.

And many of the vehicles built in Mexico are assembled with parts that are produced in the United States and Canada and cross the border without tariffs under NAFTA.

"There was a realization that there were some structural issues that had to be resolved in the auto industry to make it more competitive again. Moving parts, not all of the production, to Mexico was a good way to deal with that," said Christopher Wilson, an expert in U.S.-Mexico economic relations for the Woodrow Wilson International Center for Scholars.

Mexico's government and the car industry say the automotive industry has become the primary source of foreign currency for Mexico, surpassing oil exports and remittances from immigrants in the United States.

Migration to the U.S. has slowed dramatically in recent years, though experts attribute that mostly to tougher enforcement and a slower U.S. economy. Despite successes such as the car-making boom, Mexico still isn't creating nearly enough formal jobs for the hundreds of thousands of people entering the workforce each year.

While Mexico's official unemployment rate dropped to 4.62 percent in the last quarter of 2013, nearly 7 percent of working-age people work less than 15 hours a week and nearly 60 percent scrape by in off-the-books jobs such as street vendors or day laborers, whose benefits are virtually nonexistent and whose wages are often below the legal minimum.

The Mexican government announced Friday that the economy grew a meager 1.1 percent in 2013, its worst performance since 2009. The government is hoping to see 3.5 percent growth this year.

Mexico has roughly 580,000 auto workers, whose numbers have risen by 100,000 since 2008. They are paid about $16 a day, more than $4 less than what the average U.S. autoworker is paid every hour. More than half of all Mexican workers earn less than $15 a day, according to Mexico's census agency.

Many car factories in Mexico operate with pro-company unions and some workers have fought without success to form independent unions that could bargain for higher pay and better pensions.

"It's one of the most modern industries that is generating the most money for the country," said Huberto Juarez, an auto industry expert at the Autonomous University of Puebla. "It's not right that these workers are making so little."

Solis, the president of the auto industry association, acknowledges wages are low compared to the U.S. and Canada, but says the boom is creating a new generation of young engineers and funding automotive research in Mexico. A handful of Mexican entrepreneurs have launched boutique car companies in recent years, although their production remains insignificant compared to that of foreign manufacturers in Mexico.

"It's not only about lower salaries. That's short-sighted. It is a component of a larger equation that has to do with the expertise we are developing," Solis said.

Much of the new production is by Japanese companies drawn by the ability to move parts into and out of Mexico without tariffs. Local governments have been competing for new plants by offering tax exemptions, employee training and improved highways connecting the plants to the U.S. border and Mexican ports.

Just 25 miles from the new Honda plant, Mazda is set to open a factory next week to produce 230,000 cars a year. Nissan is expected to turn out 175,000 cars annually at a $2 billion plant it opened late last year in the nearby state of Aguascalientes. And Audi will be producing luxury models at a plant in the state of Puebla that is slated to open in 2016.

"We have gained momentum throughout the years," Economy Secretary Ildefonso Guajuardo said. "Now Mexico is attracting international attention because it has proven to have quality of production and a friendly investment climate."

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