Mexico Celebrates Investment Agreement With Hong KongBy María Fernanda Barría | Mon, 06/21/2021 - 17:35
Mexico has signed a decree announcing the Agreement for the Promotion and Reciprocal Protection of Investments with Hong Kong, a Special Administrative Region of the People's Republic of China. The agreement could secure investments of more than US$1.18 billion and boost joint economic relations.
Mexico's Ministry of Economy indicates that the agreement reaffirms both region's interest in expanding the potential that already exists for the exchange of investments between them by providing legal certainty that guarantees competition and increases legal security for investors and investments on both sides.
As previously reported by MBN, global geopolitical interests consider Mexico one of the most attractive countries for Asian markets. "Mexico has become a very attractive country because high tariff levels reduce competitiveness in certain areas but increase competitiveness in others, such as the Mexican economy. There is now greater Mexican participation in production processes," said Ernesto Acevedo, Minister of Industry, Trade and Competitiveness at the Ministry of Economy.
In addition, several analysts indicate that the USMCA treaty is crucial for the recovery of foreign investment in a context where the US is highly dependent on its Asian suppliers. "Part of the reorientation of this strategy is to reach out to US or Canadian companies that have operations in Asian countries, but whose final products are consumed in the US, Mexico or Canada. The approach has been to have a better balance in supply, production processes and presence in Mexico," Acevedo added.
There is an important investment and strengthening relationship between Mexico and Hong Kong. The Ministry of Economy signals that Hong Kong is Mexico's 26th largest investor worldwide.
Preliminary data from Mexico's Ministry of Economy shows that foreign direct investment (FDI) has grown 14.8 percent during 1Q2021 compared to the same period last year. As previously reported by MBN, the percentage represents the highest FDI recorded in the first quarter of the country's registered history, which began in 1999. The country captured US$11.86 billion in total; a significant increase compared to 1Q20's haul of US$10.33 billion. Reinvested profit from foreign companies operating in Mexico represents 59.2 percent. The new investment makes up 18.6 percent.
The Ministry of Economy indicated that Mexico has expanded its international investment agreements with 30 countries, which include: Argentina, Austria, Bahrain, Belarus, China, Cuba, Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Kuwait, Korea, Netherlands, Portugal, Singapore, Slovakia, Spain, Sweden, Switzerland, Trinidad and Tobago, Turkey, the UAE, the UK, Belgo-Luxembourg Economic Union, the US, Uruguay and Uruguay.