China’s Latin moves cause concern in Washington

Mexico's burgeoning trade deficit with China is being seen in Washington as an indicator of further problems on the horizon for the US, says ARC Future Fellow Adrian Hearn. The deficit currently stands at $41 billion - already the largest in Latin America - and is set to increase as Chinese car manufacturers led by Geely edge in on the Mexican auto sector. Across the border in the United States, Mexico's predicament is viewed with growing trepidation, said Hearn. "There's a fear that US manufacturers may soon be unable to compete with China, even in sensitive high-technology sectors like automobiles. General Motors and Chrysler were only recently rescued from the GFC by the US government, and now face the prospect of direct competition with China." Hearn, from the Department of Sociology and Social Policy, recently visited Washington DC, where he and two leading policy analysts briefed the Inter-American Dialogue and the US Department of State on the trajectory of Chinas economic relations with Mexico. (A video of the event can be viewed here. China's trade with Latin America grew to $180 billion in 2010, said Hearn, but it is unbalanced to the detriment of manufacturing economies like Mexico, and environmentally unsustainable for commodity exporters like Argentina, Brazil, and Peru.