Mexico Monitors Escalating US-China Relations

The US-China rivalry continues to grow as President Joe Biden issues an executive order limiting investment and knowledge transfer to Chinese technology firms. The order is said to be primarily motivated by fears that these tech companies could inadvertently enhance Beijing's military prowess and aspirations. Meanwhile, despite Mexico’s well-established political and economic relationships with both nations, Mexican organizations remain ambivalent about expanding business partnerships with Chinese companies. 

“The [US] habitually politicizes technology and trade issues and uses them as a tool and weapon in the name of national security,” says Liu Pengyu, Spokesman, Chinese Embassy.   

The executive order comes as a result of two years of internal debate, allowing the US Treasury Department to oversee US investment in specific categories of Chinese companies: quantum computing, military-related artificial intelligence and advanced semiconductors. The US justifies its stringent proactiveness by arguing that China's rapid technological advancement poses a potential threat to US national security. This concern aligns with US intelligence reports that “Beijing seeks the develop[ment] and acqui[sition] of advanced dual use technology for its military.”

In recent diplomatic encounters, Treasury Secretary Janet Yellen has attempted to reassure Chinese counterparts that the tech investment restrictions are aimed at specific security concerns and not a broad economic decoupling. However, China perceives Biden’s order as a veiled attempt at economic separation, thereby justifying China’s self-reliance agenda that anticipates less US investment and technology transfer. 

This executive order is placing further strain on an already fraught relationship being tested on multiple fronts. This includes US allegations against China’s apparent indifference for cybersecurity issues involving state-sponsored hackers, escalating South China Sea confrontations and increasing hostility towards Taiwan, among other concerns. Mexico has been vigilantly observing the escalating rivalry, which has notably reaped benefits from the US' strategic realignment.

Mexico’s relationship with China has evolved rapidly and in direct relationship to a stronger economic partnership with the US. For instance, Mexican telecom companies like Telefonica, led by billionaire Carlos Slim, have transitioned from viewing Huawei as a competitor to a partner and supplier, reflecting a significant shift in their collaborative approach. However, in 2018, the Mexican government initially entrusted Huawei with the task of installing 30,000 WiFi hotspots around the country, which was later transferred to Nokia to alleviate security concerns raised by the US. 

Beyond telecommunications, China's impact in lesser-known digital domains within Mexico is noteworthy. For instance, scanners produced by the China-based company, Nuctec, are employed in Mexican customs and border checkpoints. This technology could grant those with access to the collected data significant insights into the movement of items entering, exiting and transiting the country. The US quickly flagged security concerns regarding China's lack of cybersecurity and data surveillance regulations, prompting Mexico to reevaluate its decision.

Nevertheless, continued collaboration between Mexico and China across technological, economic and infrastructural domains foreshadows complexities in Mexico's partnership with the US.