The U.S. pressures Mexico, companies decouple from China, or turn to Vietnam?

Mondo International Updated on 2024-01-30

In recent years, the United States has adopted a series of obstacle measures in an attempt to undermine the industrial chain of Chinese companies around the world through "decoupling". To this end, the United States has adopted a strategy of outsourcing coastal areas. The so-called friend-shoring outsourcing is to transfer the industrial chain of American companies to other cheaper places such as India and Vietnam. However, Chinese companies have wisely used this strategy to quickly expand Chinese production into Southeast Asia by investing more money in places like Vietnam and India.

Chinese companies have invested quickly, which has forced the United States to adjust its strategy. In response to the rapid expansion of Chinese products in Southeast Asia, the United States is promoting coastal outsourcing, that is, moving production lines to neighboring countries such as Canada and Mexico in order to avoid regulations and high tax rates. But Americans still underestimate the decisiveness and wisdom of Chinese companies, many of which have shifted their production bases in Southeast Asia to Mexico, leading to an increase in Chinese direct investment in Mexico. Chinese direct investment in Mexico will grow at a rate of 48 percent by the end of next year.

U.S. pressure, Mexico's impact on Chinese companies.

However, the U.S. is unhappy with Mexico as its choice for coastal outsourcing. The U.S. and Mexico signed an agreement to strengthen foreign investment review collaboration to reduce the economic impact of Chinese companies' investment in them. Under this agreement, the two sides will establish a bilateral working group and meet regularly to exchange information. Although China was not specifically mentioned, the U.S. Treasury Department has made it clear that the establishment of the task force will play an important role in an efficient investment evaluation system.

The move worries Chinese companies, which fear that the United States will impose more sanctions on Mexico and add Chinese companies and goods to Mexico's "Entity List." While this has not yet been done, it is still possible given the close ties between the United States and Mexico.

The strategic choices of Chinese enterprises in the face of the new situation.

This series of changes has led Chinese companies to rethink their position and development strategies around the world. Although Mexico is a huge problem for Chinese companies, Mexico faces a new challenge under the U.S. strategy of outsourcing abroad.

First, Chinese companies can learn from Japan's experience and reduce their over-reliance on stereotyped products and instead develop their own core components and provide related technologies or raw materials. As a result, even if Mexico becomes an unviable place, Chinese companies will still have access to high-quality parts and technical support in the U.S. market.

Secondly, Chinese companies should take the initiative to open up new markets, open up new channels, and open up international markets. In addition to Vietnam in Southeast Asia, Chinese companies should expand more overseas, such as Africa, South America or Europe, to reduce their dependence on the United States.

Therefore, Chinese companies should strengthen their independent research and development to enhance their brand influence, so as to establish their own competitive advantage in the international market. If Chinese enterprises want to gain a foothold in the international industrial chain, they must continuously improve their own research and technical level, constantly improve their own technical level, and constantly improve their own technical level, and improve their competitiveness.

Brief summary. The U.S. strategy of "breaking the chain and separating" will inevitably have a huge impact on Chinese companies, but Chinese companies will not sit idly by. Only through flexible strategic restructuring and technological innovation can Chinese enterprises find new development opportunities around the world. Under pressure from the United States, Chinese enterprises should enhance their self-confidence, actively seek new markets, and seek new partners to adapt to the new situation of world economic development. Over time, Chinese enterprises will surely show more and more strength on the world stage with stronger and stronger strength.

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