Mar 312011

As labor costs in China rise, so more companies located there pull up stakes and move to Mexico, according to Spanish-language press reports. In 2002, wages were estimated to be 240% higher in Mexico than in China; the difference now is just 14%, and this is balanced by the savings in transport costs resulting from Mexico’s proximity to the USA. In addition, Mexican manufacturers tend to source more components from the USA than their Chinese counterparts.

In 2010, for the first time since China joined the World Trade Organization in 2002, Mexico’s share of US imports rose faster than China’s share. In 2010, Mexico had about 12% of the US import market, compared to China’s 19%.

Companies that have moved some or all of their production in the past year from China to Mexico include Meco Corporation (folding chairs and garden barbecues) which is opening a plant in Saltillo (Coahuila), and Coach Inc (premium leather goods). Mexico’s manufacturing exports jumped 30% in 2010 to 246 billion dollars.

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