China and Argentina re Falklands/Malvinas

b787 said:

There are differences, but we want to cooperate, Argentina received the tracking station as a part of an economic deal, the plan is China will invest in Argentina, buy goods from Argentina (probably and likely Argentina will get some Intel) in exchange from Hosting the base.

We buy much more from China than Argentina and we are buying more than Brazil does from China.
In fact we buy 60 billions from China and Brazil only buys 34 billion, if you see we buy more from China than Argentina or Brazil put together

However our policies are different simply because at this moment neither Argentina or Brazil have the large amounts of imports we do have from China, we can not buy from China the same thing we make, and contrary to Brazil or Argentina we are not exporting as much commodities these days

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how much of what Mexico buys from China is re-exported to the US?

b787 said:

Mexico is not closed to China, we do commerce with China, however there area facts you do not know, of the USD $77 billion dollars of bilateral trade, USD$ 66 are imports from China, Mexico buys USD $66 billion dollars of Chinese goods while China only buys USD $6 millions of Mexican goods

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As Shen already pointed out, that headline figure is likely wildly distorted by Mexican firms buying wholesale from China, then either simply selling it on to the US or repackaging it and then selling the goods on to take advantage of NFTA, and undercutting their Chinese suppliers/competitors in the US.

Even if we take that at face value, that figure is even more reason why Mexico should co-operate more with China not less.

If things are left to market forces, Mexico clearly isn't doing well in balance of trade terms with China because they are direct competitors with Chinese firms in many respects.

Mexico should instead be looking at how to draw in Chinese FDI, using the American market and NFTA as the incentive.

As Chinese domestic wages rise, it may have been attractive for Chinese firms to think about outsourcing a lot of their light manufacturing to places like Mexico, who would have the advantage of lower wagers, closer proximity to the American market, and NFTA.

Similar circumstances and favourable government and investment policies and environments have persuaded many Japanese and South Korean manufacturers, especially carmakers, to set up production facilities in places like the UK to gain favourable access to the EU market, which greatly benefit the UK economy.

Mexico should have been looking to pursue a similar tactic to see how they can turn China into an asset that benefits the Mexican economy and people instead of needlessly and pointlessly turn Chinese investors off with its hostile business and cultural environment.

As I alluded to in my last post, if you are determined to treat China as the enemy and look to poke it at every opportunity, don't be surprised if China isn't particularly inclined to go out of its way to do Mexico any favours and may just decide to prod back every now and again.

plawolf said:

As Shen already pointed out, that headline figure is likely wildly distorted by Mexican firms buying wholesale from China, then either simply selling it on to the US or repackaging it and then selling the goods on to take advantage of NFTA, and undercutting their Chinese suppliers/competitors in the US.

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Sorry it shows you do not understand NAFTA, there is something called “Rules of Origin” under NAFTA read about it and it will show you how wrong you are
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exported goods. Invalid Certificates of Origin based on an improper or incorrect classification of the “origin” of a good, have recently become one of the largest problem areas for exporters, often resulting in significant fines and penalties. An invalid NAFTA Certificate of Origin will result in the denial of NAFTA origin duty free treatment. And be warned, duties can be applied retroactively.
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shen said:

how much of what Mexico buys from China is re-exported to the US?

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For Mexico to be benefited from a product made in China it most have contents of Mexican labor, in few words it most have added work.

To put you an example, a motorcycle, like the Italika, it has China made parts but it also has to have parts made in Mexico

As part of NAFTA, the United States, Canada and Mexico (the “Parties”) have all agreed to reduce and/or eliminate tariffs on goods that originate from their respective territories. However, the Parties continue to apply significantly higher tariffs to goods that do not originate in one of the NAFTA countries. Maximum benefits (i.e. duty free entry into the NAFTA market) are only conferred upon goods that are said to “originate” in one of the three NAFTA countries. Rules of Origin are therefore extremely important, because they act as the mechanism that determines which goods can be properly classified as “originating” in the NAFTA territory. Consequently, this decides which goods are entitled to preferential tariff treatment.
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Argentina and Brazil have similar rules to NAFTA through the MERCOSUR FTA, so if Argentina hosted the base is related to the fact it was a result of Cristina Kitchner`s polices

b787 said:

Sorry it shows you do not understand NAFTA, there is something called “Rules of Origin” under NAFTA read about it and it will show you how wrong you are
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I know enough about such rules in general to know that there is always a way (legal) around them.

However, if inputs from non-NAFTA countries go through a certain amount of processing or transformation within the NAFTA region, they may qualify as NAFTA originating goods.

The predominant way in which a good, which uses non-NAFTA-originating inputs, can qualify as a NAFTA-originating good, is through what is called a change in tariff classification, otherwise known as a tariff-shift.

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From your very own link.

That is just the by-the-book legal way, and I am sure we both know there are plenty of "grey" ways to make imported goods meet Rules or Origin rules as well as many downright illegal ways.

For example, I would not be surprised if there are Chinese manufacturers willing to stamp "Made in Mexico" on their wears to win orders, just as I would not be surprised if there are Mexican merchants willing to order, repackage and sell such goods across the boarder to America.

That's all I will say on that area, as its probably not a good idea to get too much into such illegal methods, but I don't think anyone can seriously claim nothing of the kind happens.

It was a minor point in my original post anyways.

If anything, Rules of Origin strengthens my core argument that Mexico would make an attractive place for China to invest to set up light manufacturing operations in to take advantage of NFTA, if only Mexican politicians would have the vision to see the benefits of such a move and resist their petty attempts at vilifying China to score cheap political points.

plawolf said:

I know enough about such rules in general to know that there is always a way (legal) around them.




For example, I would not be surprised if there are Chinese manufacturers willing to stamp "Made in Mexico" on their wears to win orders, just as I would not be surprised if there are Mexican merchants willing to order, repackage and sell such goods across the boarder to America.

That's all I will say on that area, as its probably not a good idea to get too much into such illegal methods, but I don't think anyone can seriously claim nothing of the kind happens.

.

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You do not know about the rules

As mentioned earlier, NAFTA tariff preferences will only apply to goods that are found to “originate” in one of the three NAFTA countries. Goods originating from countries other than the U.S., Mexico and Canada – that are merely shipped through, or go through minimal transformations in the NAFTA region – are not eligible for NAFTA benefits
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therefore it shows you really are making a ridicule, since you are trying to Say it is easy for a Chinese good to avoid taxes and tariffs.


The goods made in China can only be re-exported if we add labor, in few words like the Italika motorcycle i showed you, they have different contents of Chinese parts, they are made in Mexico by a Mexican firm, they can be exported if they have enough parts made in Mexico, legally speaking that is the only way,

China and Mexico won`t stop doing commerce neither China will stop investing in Mexico, because at the end it is possible to by pass the rules if Chinese companies come to Mexico and build there their products

b787 said:

You do not know about the rules

therefore it shows you really are making a ridicule, since you are trying to Say it is easy for a Chinese good to avoid taxes and tariffs.

The goods made in China can only be re-exported if we add labor, in few words like the Italika motorcycle i showed you, they have different contents of Chinese parts, they are made in Mexico by a Mexican firm, they can be exported if they have enough parts made in Mexico, legally speaking that is the only way,

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I don't know why you are getting so hung up on a minor point.

So Mexican firms need to add labour, parts, whatever, doesn't change the fact that all the Chinese parts they import all count as imports as far as the headline balance of trade figure is concerned. But they are in fact intended for ultimate re-export rather than consumption.

How much of Mexico's Chinese imports are for domestic consumption compared to parts imported to be ultimately sold on to the American market is the key question here.

China and Mexico won`t stop doing commerce neither China will stop investing in Mexico, because at the end it is possible to by pass the rules if Chinese companies come to Mexico and build there their products

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Well, as I have already said, China has no problem with things carrying on as they have been, its not China who is worried about balance of trade figures.

Since Mexico appears to be the one on the loosing end from the headline figures, you'd think Mexico would have the incentive to try and do something about that.

However, all the reneged deals and hate peddling by Mexican politicians is making Mexico anything but an inviting investment destination for the Chinese government or firms.

As I have been trying to stress, Mexico offers many advantages that should make it a popular investment destination especially for China, and getting Chinese companies to invest in Mexico to build factories would benefit both Mexico and China.

The fact that little seems to be happening in the way of that should be proof that Mexico is adopting the wrong strategy with regards to its deals with China by seemingly blindly following (or are they being force-led?) the America approach of barely veiled antagonism and open distain verging on hostility towards China.

Chinese firms have little choice but to put up with the crap American politicians love to heap their way because of how big and important the American market is. Mexico doesn't have anything like that to offset all the negatives they are creating, which is why there isn't more Chinese investment in Mexico.

China has been a major driver of world economic growth, and has been for a long time now.

If you think needlessly shunning the opportunities China's rise and growth offers while doing things that does little to nothing to offset the negatives cause by China's rise and growth, as Mexico has been doing, is a good idea, well fair enough.

But if you think Mexico could and should benefit from China's rise, then Mexico needs to start adopting more constructive strategies and attitudes towards China than what it is currently pursuing.

To sum up, in my view, Mexico has been seeing and treating China as a threat and competitor, and in a way, that is becoming a self-fulfilling prophecy as China reacts to Mexico's actions and words.

That need not be, and in fact, both would benefit far more as partners rather than rivals.

plawolf said:

I don't know why you are getting so hung up on a minor point.

So Mexican firms need to add labour, parts, whatever, doesn't change the fact that all the Chinese parts they import all count as imports as far as the headline balance of trade figure is concerned. But they are in fact intended for ultimate re-export rather than consumption.







That need not be, and in fact, both would benefit far more as partners rather than rivals.

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To illustrate the idea, consider an iPad for example, which is designed and owned by Apple, assembled in China, and exported to the US and other countries. In trade statistics, each iPad sold in the US adds $275 to America’s trade deficit with China. However, most parts of iPad are produced outside China, and therefore the value-added contributed by China is merely $10.4 As a result, although iPads accounted for around $4 billion of America’s reported trade deficit with China in 2011, the Chinese content in the deficit was estimated to be only $150 million. Similar difference between trade statistics and actual domestic content of trade has been reported by case studies by Linden, Kraemer, and Dedrick (2007) for iPod, and by Xing and Detert (2011) and the New York Times (2010) for iPhone. Finally, Branstetter and Lardy (2006) estimate that Chinese domestic value-added accounts for only 15% of the value of exported electronic and information technology products. All above cases imply that relying on the conventional trade statistics measure a country’s engagement in global trade could be very misleading --- Johnson and Noguera (2012), for example, estimate that after accounting for foreign content in Chinese export, the controversial US-China imbalance is in fact around 40% smaller than what reported in official trade statistics. 5

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Economics do not work in the way you have announced, to start not everything that Mexico buys is re-exported, neither all what China exports to Mexico is 100% made in China.

Second Mexico and China will not stop doing business, neither China stop investing in Mexico, if China wants to sell in NAFTA will also require start doing business in Mexico.

And third Mexico receives a lot of investment from the US and Europe, if you think Mexico can not ask Siemens or Mitsubishi to build trains in Mexico, you are wrong bombardier already build trains in Mexico for the subway system of all Mexico and they have high speed trains that very easily can be build in Mexico

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Any way this is too much off topic so let us move on

But of course the Mexican govt will not risk its probity again by not asking for open tender and thereby excluding China from bidding for the bullet train project.

Back on topic.