“They come to me with all kinds of needs. Some are looking for a warehouse, some are looking for a store, some want to join the company, some ask how to come to Mexico. “If I don’t look at my phone for an hour, I end up with 100 unread messages,” said Lin, 45.
For many small-scale Chinese merchants, Mexico has become a new gold rush destination, contrary to the popular image of Chinese society as a remote and dangerous place plagued by drug trafficking and gang warfare.
This led to an influx of Chinese expatriates. There were also parts of the Chinese diaspora from Europe and other Latin American countries, which face saturated, low-growth markets amid inflationary pressures. Some came directly from China, where growing industrial overcapacity and lack of demand in the years following the pandemic forced them to leave.
Sebastian Ho is one of them. The 44-year-old was in Mexico for more than a decade before returning to his native Guangdong province in 2016. He returned to Mexico City two years ago and subsequently rented space on the ground floor of Izazaga 89. Yiwu City – Lin’s largest wholesale center. The 16-story store is named after the world’s largest trinket market in eastern China, selling everything from keychains to water bottles.
“In China now, it is very difficult for people without higher education to earn money. There is too much pressure and it is very difficult. fan” Ho said, using a word that translates to “involution.” The term was originally used to describe a process in which additional inputs cannot produce any more output.
Made in Mexico?Taiwanese multinationals seek greener pastures away from China
Made in Mexico?Taiwanese multinationals seek greener pastures away from China
And this entanglement is already spreading to Mexico City as more Chinese merchants arrive. Many were captivated by Lin’s videos posted on Douyin, China’s version of TikTok, touting the country’s vast economic opportunities.
The Mexican economy, an important destination for U.S. nearshoring, grew at an annual rate of 3.2% in 2023. Within the same year, Mexico moved up two places to become the world’s 12th largest economy, according to data from the International Monetary Fund.
“There are too many people [to Mexico]. A year ago it was much easier to make money. Currently, our margins are very thin,” Ho said.
Still, many stores in Yiwu are currently undergoing renovations and are opening within the next few weeks. We often see beginners looking for rental space. Usually they go up to his 16th floor and go down the stairs to see each floor.
The Mexican government issued temporary residence visas to 5,018 Chinese immigrants in 2023, more than double the number from the previous year, according to data from Mexico’s Ministry of Tourism.
According to the latest statistics, China was the third-largest country of origin for immigrants to Mexico last year, after the United States (10,782) and Colombia (6,734).
Chinese is a common language heard in the shopping malls of Nuevo Polanco, Mexico City’s central business district. One of the office buildings there houses the Mexican headquarters of major Chinese multinational companies, many of which are on the U.S. backlist. Huawei and Hikvision.
Monterrey, a major industrial city near the U.S. border, has so far benefited the most from nearshoring, with Chinese businessmen, many wearing sweatpants and sweatshirts, carrying millions of dollars worth of investments. They’re talking on the phone – a common sight in luxury hotels.
China’s investment in Latin America shifts to small-scale, strategic projects
China’s investment in Latin America shifts to small-scale, strategic projects
“When I first came to Monterrey 20 years ago, there were very few Chinese people here,” said Zhang Yijian, a Chinese interpreter for the government of Nuevo León state, of which Monterrey is the capital. “Now you can see it everywhere.”
Eduardo Zilli said that unlike the post-pandemic increase in U.S. remote workers, which has led to the gentrification of neighborhoods, or the increase in Haitian immigrants fleeing their crisis-torn homeland, the influx of Chinese immigrants is a huge draw from local residents. He said it has not caused any backlash yet. -Apango, Professor of Chinese Studies at the Autonomous University of the Capital of Mexico.
Historically, Mexican society has largely opposed China’s presence. However, with the current Mexican government’s efforts and China’s promotion of soft power, acceptance of Chinese culture and immigration is expanding, Tsiri Apango said.
With the influx of immigrants, exposure to Chinese brands is increasing in Mexico.
In 2023, China will become the second largest car importer after Russia. Mobile phone makers such as Oppo and Honor and electric car maker BYD are currently the major companies leasing large billboards at airports. His ride-hailing giant DiDi has also established itself as a strong competitor to Uber since launching in Mexico in 2018.
But those trying to emulate Lin’s success in other parts of the country are facing resistance from Mexican vendors.
In June, local merchants staged a large-scale protest in Tulancingo, Hidalgo state, demanding that the city and state governments ban the opening of new Chinese-owned stores.
Hundreds of demonstrators held placards saying “The Chinese go away” and “This is unfair competition” and chanted slogans such as “Long live Turancingo, no trade with China.” Local media reports said commercial union representatives subsequently circulated a petition calling for a ban on new permits, fearing that the entry of Chinese competitors would lead to more unemployment in the city.
The state government has not yet enacted any legislation, but in December the city of Huejutla said it would not renew foreign store licenses after they expire, citing “risks to job creation and income for Mexicans.” announced. .
Chinese automaker BYD launches and promotes virtual showrooms in Latin America
Chinese automaker BYD launches and promotes virtual showrooms in Latin America
Life hasn’t always been easy for Lin either. On a Thursday in mid-March, Mexico City authorities ordered the entire city of Yiwu to shut down, blocking access and posting notices announcing the suspension of activities.
Local media reported that the operation was carried out in response to complaints about potential smuggling activities and unauthorized sales of Chinese products without the required import taxes. The report also notes the sale of e-cigarettes, which is currently not regulated by Mexican health authorities.
But rumors among the Chinese community tell a different story. Many believe this is a “lack of money” issue, indicating that the seizure was a set up by the local government to solicit more bribes.
The Mexico City government and Lin did not respond to inquiries regarding the closure of Yiwu. The entire market reopened the next day.
Despite shrinking profits and occasional pullbacks, there is still optimism for many Chinese wholesalers. Unlike Chinese manufacturers who set up factories in Mexico to expand into northern markets, they are not vulnerable to pressure from the United States to serve the local market. On the other hand, low prices are an absolute competitive advantage.
“This is the same everywhere in the world. No matter where you go, price is the most important thing,” said Miguel Wen, who runs a shop with his wife in Yiwu and sells socks and other clothing from a local factory. Ta.
Hayashi’s ambitions extend beyond the wholesale market. He said he had a “city creation plan.”
His first logistics park, located a 45-minute drive from Yiwu city and on an approximately 75,000 square meter site with 53 warehouses, has been under construction since early February. All spaces will be sold out within six weeks and warehouse sales have already begun for a second logistics park in the planning stages, he announced on his social media accounts.
“All parks will naturally evolve into commercial zones within a few years,” he writes. “If you don’t have that vision, you’re missing out on important wealth opportunities in Mexico.”
Meanwhile, his next goal is to build an industrial park to house manufacturing plants. Currently, many products sold at his wholesale market, such as apparel, are subject to Mexican anti-dumping duties, and containers containing these products are at risk of being confiscated by customs officials during import. expensive.
“China has huge production capacity, so there is an urge to expand overseas,” Lin said. “If we set up a garment factory here, employ local workers and become a local manufacturer, there would be no anti-dumping risk.
“And I give them a channel and a platform.”
