presented by china advanced research center san antonio, texas, usa investment & trade...
TRANSCRIPT
Presented by
China Advanced Research Center
San Antonio, Texas, USA
Investment & Trade Opportunities
for Chinese Enterprises under
NAFTA
What is NAFTA?
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NAFTA:
“North America Free Trade Agreement”
A trade agreement between the US, Canada and Mexico
Designed to reduce restrictions on trade and investment between the US, Canada and Mexico
Built on the Canada US Trade Agreement signed in 1989
Took effect on January 1, 1994
Scope of NAFTA:
All of North America
400 million population
US $8 trillion in goods and services
NAFTA Impact:
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NAFTA: 1994 – 1996: The First two years
A trade increase of $127 billion between the U.S., Canada and Mexico -- a 43 percent gain
U.S. exports to Mexico hit a record $57 billion -- an increase of 37 percent
In the fourth quarter of 1996 alone, the Department of Commerce reports U.S. exports to Mexico increased at an annual rate of $64 billion.
U.S. market share in Mexico increased from 69 percent to 76 percent of total Mexican imports.
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TRADE AMONG NAFTA COUNTRIESLonger term: 1985 – 2000(Millions of 1996 USD)
0
100
200
300
400
500
600
700
1985 2000
Total
US - Can
US - Mx
Mx - Can
Global View:
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Tri-lateral Collaboration for 21st Century
Global economics is the wave of the 21st Century.
With its entry to WTO, China is ready for global expansion.
Three driving forces: Culture, Management and Technology
should be closely examined for this global collaboration.
Tri-lateral Collaboration among China / US / Mexico business
can generate significant impact in Pan Pacific trade
practices.
Chinese investments in the US can provide direct access to
the North American investment and consumer markets via
NAFTA
Global Trends:
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SHARE OF WORLD INCOME
1980 2000
U.S. 21% 22%
P. R. CHINA 4% 12%
MEXICO 2% 2%
Source: IMFSource: IMF
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Redistribution of Income brings Opportunity
China’s share of World Income is increasing dramatically
Cash available = Opportunity for Global Investments
US share of World Income has slowed down
Welcomes Global Investments and Trade for growth
Mexico’s share of World Income remains flat
Needs Trade and Investments for growth
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MEXICO: SHARE OF GDP(Share of Mexico’s Total)
Population 1993 2002
Northern States 17% 21% 24%
Southern States 11% 5% 5%
On a per-capita basis, the North On a per-capita basis, the North contributescontributes threethree timestimes as as
much to Mexico’s GDP;much to Mexico’s GDP;
Regional GDP is Regional GDP is growinggrowing more than more than twicetwice asas fastfast in the North. in the North.
Source: INEGI; CONAPOSource: INEGI; CONAPO
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Cross Boarder Trends
Opportunities in
NAFTA:
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Investment Opportunities/Benefits:
Direct Facilities ownership in US Foreign Trade Zone
Business alliances with US owned companies for import/export under NAFTA
Business partnerships with US owned companies for import/export under NAFTA
Light Manufacturing in US Foreign Trade Zone for import/export under NAFTA
Product distribution from US Foreign Trade Zone under NAFTA
Direct access to the Maquiladora Program
Local and federal tax advantages
Access to technology and markets
Joint development of products and services
Import/Export tax advantages
Import/Export tariff advantages
Teaming with Mexican cross boarder manufacturing
Opportunities Benefits
NAFTA Connection:
Why Texas?
NAFTA Center,Business Environment
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TEXAS- NAFTA Center
By 2002, largest exporter among U.S. states
Its exports to Mexico and Canada doubled from 1993 to
2003, from $20 to $43 bn.
Channeled 46% of all U.S. exports to Mexico (2000)
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TEXAS- Business Environment: Highly ranked among all US states
Texas’ largest export market is NAFTA
Second in US for new job growth
Sixth in the US “e-Government” index score
Competitive
Tax
Structure
CompetitiveLaborForce
InnovativeBusiness
Environment
ActiveForeign TradeZone
NAFTA Connection:
San Antonio is Unique
Location, Infrastructure
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San Antonio - Location: Gateway to Mexico’s fastest growing regions
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San Antonio -Infrastructure: In place and ready to serve growing markets
Highway and Rail Air Travel
China vs Mexico in trading with US
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Table 1U.S. imports from leading suppliers, 2000-2005
Supplier
2000
2001
2002
2003
2004
2005
Change 2000/05
Share in 2005
Billion U.S. dollars Percent
EU 15 218 219 224 242 270 297 36 18
Canada 229 217 211 224 256 288 26 17
China 100 102 125 152 196 243 143 15
Mexico 135 131 134 137 155 169 25 10
Japan 146 126 121 118 130 138 -5 8
All other 377 338 340 377 453 527 40 32
Total 1,205 1,133 1,155 1,250 1,460 1,662 38 100
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 2U.S. producers’ shipments of manufactured goods, total U.S. imports from China, 2000-2005
Category
2000
2001
2002
2003
2004
2005
Change 2000/05(percent)
U.S. producers’ shipments of manufactured goods (billion U.S. dollars)
4,20
9
3,970
3,89
2
3,99
9
4,37
4
4,681
11
Total imports from China (billions dollars) 100 102 125 152 196 243 143
Ratio of total U.S. imports from China to U.S. producers shipments of manufactured goods (percent)
2.4
2.6
3.2
3.8
4.5
5.2
n.a.
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Category Value Category Value
Percent PercentCrude petroleum
22,4 13.2 Computers and parts
40.3 16.6
Motor vehicle parts
21 12.4 Textiles and apparel
26.9 11.1
Motor vehicles 18.5 10.9 Toys, dolls, games, and sporting goods
17.2 7.1
Televisions & video monitors
10 5.9 Telephone equipment
14.4 5.9
Agricultural products
9.3 5.5 Consumer electronics
13.6 5.6
Textiles and apparel
8.3 4.9 Footwear 12.6 5.2
Computers and parts
7.2 4.2 Chemicals and related products
12.2 5
Telephone equipment
5.6 3.3 Furniture 11.7 4.8
Chemicals and related products
5.4 3.2 Household appliances
5.7 2.4
Electrical circuit
4.3 2.6 Televisions & video monitors
5.1 2.1
Medical goods 3 1.8 Luggage and handbags
4.6 1.9
Measuring, testing, and controlling instruments
2.9 1.7 Lamps & lighting fittings
3.8 1.6
Household appliances
2.7 1.6 Base metal products
3.7 1.5
Electrical motors
2.3 1.3 Motor vehicle parts
3.2 1.3
Consumer electronics
2.2 1.3 Air-conditioning equipment
2.4 1
Air-conditioning equipment
2.2 1.3 Electrical circuit apparatus
2.2 0.9
All other 41.9 24.8 All other 63 26Total 169.2 100 Total 242.6 100
Mexico ChinaShare of
total (per-cent)
Share of total (per-
cent)
Billion dollars Billion dollars
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Table Apparel: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
China 8.5 8.9 9.6 11.4 13.6 20.0 135 26
Mexico 8.7 8.1 7.7 7.2 6.9 6.3 -28 8
Canada 1.9 1.8 1.8 1.7 1.7 1.5 -21 2
Japan 0.1 0.2 0.2 0.3 0.3 0.1 0 *
All other 45.1 45.0 44.6 47.7 49.9 48.7 8 64
Total 64.4 64.0 63.9 68.3 72.4 76.5 19 100
* Less than 0.5 percent.Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table Computer hardware: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
China 10.7 10.5 14.9 22.1 33.9 40.3 277 43
Mexico 9.0 10.4 8.9 7.6 7.8 7.2 -20 8
Japan 14.5 10.2 8.7 7.0 6.8 6.5 -55 7
Canada 3.7 2.8 1.7 1.5 1.7 1.8 -51 2
All other 52.4 40.6 41.5 38.6 39.1 38.2 -27 41
Total 90.4 74.5 75.8 76.9 89.3 94.0 4 100
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table Telephone equipment: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
China 2.9 3.2 4.7 5.9 9.6 14.4 397 29
Mexico 4.6 4.4 4.2 4.7 5.9 5.6 22 11
Canada 9.2 3.9 3.0 2.5 2.7 3.3 -64 7
Japan 3.9 2.5 1.8 1.5 1.6 1.9 -51 4
All other 11.5 13.2 14.3 16.4 19.5 24.0 109 49
Total 32.1 27.2 27.9 31.0 39.3 49.2 53 100
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 7Household appliances: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Chang
e, 2000/0
5
Share of total in 2005
Billion U.S. dollars Percent
China 2.4 2.8 3.4 4.1 4.9 5.7 138 39
Mexico 1.5 1.8 2.0 2.1 2.3 2.7 80 19
Canada 0.9 0.8 0.9 1.0 1.0 1.0 11 7
Japan 0.2 0.2 0.2 0.2 0.2 0.3 50 2
All other
2.7 2.6 3.1 4.0 4.1 4.8 78 33
Total 7.7 8.4 9.6 11.6 12.5 14.5 88 100
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 8Consumer electronics (except televisions): U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change
, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
China 6.3 6.3 8.2 8.8 11.6 13.6 116 53
Japan 5.8 4.2 4.5 4.5 4.5 4.3 -26 17
Mexico 3.0 2.8 2.5 2.3 2.3 2.2 -27 8
Canada 0.1 0.1 0.1 0.1 0.1 0.2 100 1
All other 6.7 6.2 6.2 6.2 5.9 5.6 -16 22
Total 22.0 19.5 21.5 21.5 24.4 25.9 18 100
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 9Furniture: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Chang
e, 2000/0
5
Share of
total in
2005 Billion U.S. dollars Percent
China 4.1 4.6 6.4 8.0 9.8 11.7 185 48
Canada
4.2 3.9 38 3.8 4.0 4.1 -2 17
Mexico 1.0 0.9 1.0 1.0 1.2 1.2 20 5
Japan 0.1 * * * 0.1 0.1 0 *
All other
5.8 5.4 5.8 6.1 6.7 7.2 24 30
Total 15.2 14.8 17.0 19.0 21.8 24.3 60 100
* Denotes less than $50 million or less than 0.5 percent.Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 10Motor vehicles: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
Canada 45.7 41.2 41.6 41.0 46.7 48.5 6 33
Japan 34.5 33.0 35.2 33.1 33.2 35.9 4 25
Mexico 21.0 21.3 20.8 19.3 19.1 18.5 -12 13
China * * * * * 0 * *
All other 28.4 31,8 35.7 41.0 43.8 43.3 52 30
Total 129.6 127.3 133.3 134.4 142.8 146.2 13 100
* Denotes less than $50 million or less than 0.5 percent.Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 11Auto parts: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
Mexico 14.6 14.0 16.0 17.3 19.4 21.0 44 27
Canada 14.5 12.9 14.2 15.5 16.9 18.1 25 24
Japan 11.9 11.1 12.5 13.3 15.0 16.1 35 21
China 0.8 0.9 1.3 1.7 2.4 3.2 300 4
All other 11.0 10.5 12.2 14.0 15.8 18.4 67 24
Total 52.8 49.4 56.2 61.8 69.5 76.8 45 100
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 12Television receivers and video monitors: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change
, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
Mexico 4.9 5.1 5.2 5.5 7.7 10.0 104 44
China 0.2 0.3 0.8 1.5 2.4 5.1 2,250 22
Japan 0.7 1.3 1.7 2.2 3.0 2.6 271 11
Canada * * * * * * * *
All other 1.9 2.0 2.9 3.4 4.4 5.0 163 22
Total 7.7 8.6 10.6 12.7 17.5 22.7 195 100
* Denotes less than $50 million or less than 0.5 percent.Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 13Measuring, testing, and controlling instruments: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change
, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
Mexico 2.6 2.6 2.8 3.1 2.9 2.9 12 19
Japan 2.3 2.1 1.9 2.0 2.4 2.4 4 16
Canada 1.1 1.1 1.1 1.0 1.2 1.3 18 8
China 0.4 0.6 0.6 0.8 1.2 1.3 225 8
All other 5.4 5.5 5.1 5.6 6.7 7.5 39 49
Total 11.7 11.8 11.6 12.6 14.4 15.4 32 100
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 14Electric motors, generators, and related equipment: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
Mexico 2.0 1.9 2.1 2.2 2.2 2.4 20 28
Japan 1.2 1.6 1.4 1.0 1.1 1.3 8 15
China 0.4 0.4 0.6 0.7 0.9 1.1 175 13
Canada 0.5 0.6 0.5 0.5 0.5 0.6 20 7
All other 2.4 3.1 2.6 2.4 2.3 3.1 29 36
Total 6.5 7.6 7.2 6.8 7.0 8.5 31 100
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 15Medical goods: U.S. imports from selected trading partners, 2000-2005
Country
2000
2001
2002
2003
2004
2005
Change, 2000/05
Share of total in 2005
Billion U.S. dollars Percent
Mexico 1.3 1.5 2.0 2.3 2.6 3.0 131 15
Japan 1.3 1.3 1.3 1.3 1.5 1.7 31 8
China 0.4 0.5 0.5 0.6 0.7 0.9 125 4
Canada 0.3 0.3 0.4 0.5 0.5 0.6 100 3
All other 5.9 7.3 9.0 11.4 13.7 14.3 142 69
Total 9.2 10.9 13.2 16.1 19.0 20.5 123 100
Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Table 16U.S. import categories for which China supplied over one half of total U.S. imports in 2005
Category
U.S. imports in 2005 China’s share of
total
Mexico’s share of total
China
Mexico
Total
Millions of U.S. dollars Percent
Dolls 963 0 1,038 93 0
Umbrellas 331 1 371 89 *
Toys 8,092 291 9,287 87 3
Luggage and handbags 4,573 55 6,151 74 1
Games 4,855 56 6,745 72 1
Footwear 12,654 247 17,834 71 1
Lamps & lighting fittings 3,784 957 5,831 65 16
Sporting goods 3,248 178 4,978 65 4
Bicycles 791 2 1,434 55 *
Brooms and brushes 656 150 1,236 53 12
Consumer electronics (except televisions)
13,634
2,184
25,866
53
8
Portable electric hand tools 1,219 713 2,424 50 29
Subtotal 54,800 4,834 83,195 66 6
All other 187,838 164,382 1,639,656 11 10
Total 242,638 169,216 1,722,851 14 10
* Denotes less than 0.5 percent.Source: Compiled by the U.S. International Trade Commission from official statistics of the U.S. Department of Commerce.
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Products for which Mexico is an important supplier to the U.S. market, but China is not:
1. See tables 10, 11, 13, 14, and 15:
Motor vehicles Auto parts Measuring, testing, and controlling instruments Electric motors, generators, and related equipment Medical goods
2. For these categories, Mexico supplied 18 percent of U.S. imports in 2005 and China supplied 2 percent.
3. Mexico is most competitive relative to China in products with the following characteristics
a. High ratio of weight to value
(1) Motor vehicles
(2) Large screen televisions
(3) Major household appliances
b. Quality (rather than price) intensive
(1) Medical goods
(2) Process control instruments
c. Are inputs for industries that require just-in-time delivery, customized production, or require frequent design changes
(1) Auto parts
d. Protection in intellectual property is important
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Products for which China supplied over one half of U.S. imports in 2005
1 Table 16 Toys, dolls, games, sporting goods, and bicycles
Leather goods, including footwear, luggage, & handbags
Lamps and lighting fittings
Umbrellas, brooms, & brushes
Consumer electronics & portable electric hand tools
2. For these categories, Mexico supplied 6 percent of U.S. imports in 2005 and China supplied 66 percent.
3. These products are:
(1) Labor intensive (many require sewing)
(2) Have long production runs
(3) Require few style changes
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Products where competition between Mexico and China is most intense:
1. See tables 4-9, & 12
Computer hardware
Product life cycle: Mexico at the start up phase and end (customization)
China during mature phase with long production runs
Apparel China—light weight & labor intensive
Mexico—heavier items, quick turn around, less sewing
Telephone and telegraph equipment China—hand sets & cell phones
Mexico—switch gear & other equip. for phone companies
Consumer electronics (except televisions)—all China
Furniture China—wood household furniture (lathe work)
Mexico—furniture for the Southern California market
Household appliances China—counter top appliance
Mexico—major appliances (washers, dryers, refrigerators)
Televisions & computer monitors:
Mexico—larger screen televisions
China—computer monitors and smaller televisions
Motors and generators: Mexico leads China in all categories, especially medium/larger sizes
China—competitive only in the smaller-sized motors
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Opportunities for cooperation between China and Mexico
A. Follow the Japanese and Korean models for investment in manufacturing facilities in Mexico to supply to U.S. market, using North America suppliers for materials and components, as well as suppliers in Asia
1. Household Appliance
2. Fabricated Metals
3. Auto Parts
B. Invest in textile knitting and weaving mills to supply fabrics for the North American production of apparel and textile goods rather than shipping final goods from China.
China Advanced
Research Center
Thank You