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    China Southern establishes air corridor with Mexico, with Nearshoring in its sight

    China Southern Airlines Co., China's leading airline, will launch its first direct flight to Mexico on April 17, establishing an air corridor between Shenzhen and the Mexican capital, which cements itself as a gateway to the American continent for far east companies. The influx of Chinese capital in Mexico has increased exponentially in recent years, reaching $587 million USD in 2022, with sustained growth expected in the next years as projections for nearshoring and reshoring continue to rise, and bidirectional commerce between the countries increasing by 38% in the last 4 years, according to Banxico. This flight, which would be the longest by China Southern Airlines at 16 hours long and over 14 thousand kilometers traversed, makes strategic sense for Chinese companies looking to kickstart their American ventures. Huawei, Tencent, BYD, and DJI are among the leading brands based in Shenzhen that could benefit from the international connection.

    The growing importance of Nearshoring in Mexico

    Nearshoring, allowing Far East companies to operate and target North American markets, has boomed in recent years, partly due to increased competition between the United States and China, with tariffs and duties being levied, as well as an evolving ecosystem due to economic ideological differences between democratic and republican leaderships in the US, as well as changes from NAFTA into USMCA altering the definition of foreign products and what is exempt from taxes. The ongoing commercial wars between the United States and China have created a need for incorporating companies overseas and rerouting products and supplies to efficiently reach new and desired markets. This has uniquely positioned Mexico as a leader for such needs, providing strategic placement in commercial routes for North, Central, and South America, acceptable trade conditions thanks to treaties with the United States, Canada, and China, as well as an interesting combination of infrastructure, operational, and workforce costs. The numbers paint a positive picture: Raquel Buenrostro, Mexico’s Secretary of Economy, declared in October 2023 that investments in shoring operations have reached $110 billion USD, $80 billion of which are from foreign investments. The projections estimate that nearshoring alone will bring in those same $80 billion by 2030 for the country. This also creates demand for strategic locations, with proper infrastructure and services. The AMPIP (Mexican Association of Private Industrial Parks of Mexico) foresees the need for 6 million m² destined for nearshoring operations. Grupo Frisa is a leading developer in this area, with industrial parks developed along the most important business routes and ports throughout the country, firmly establishing us as the best and most trusted option for clients looking to start their Nearshoring operation.

    Projections and what it means for the Mexican Economy

    According to Moody’s, Mexico’s economy will grow by 2.2% in 2024, driven by internal demand and nearshoring. With over $35 billion USD in direct foreign investments, it is one of the top 10 countries in the world at capturing overseas capital, which is an important indicator of nearshoring capabilities and relevance. The USMCA impacts the spending of over 370 million consumers in North America, with an estimated $15 million traded every minute between the three partners according to Mexico’s Secretary of Economy. The spending power of this cluster represents a huge opportunity for foreign companies, but operational, production, and trade complications create a need for nearshoring in order to fully commit and profit from it. Costs of specialized labor, with a young and dynamic workforce, also make Mexico an important partner for nearshoring efforts. With quick connections and capable infrastructure, Mexico City, Monterrey, Guadalajara, Queretaro, and Tijuana have become world-class hubs for trade and production, and Grupo Frisa has an important presence through world-leading Industrial Parks in each of them. Grupo Frisa offers strategic placement, infrastructure, and consulting for all your nearshoring needs, allowing any company to quickly and efficiently transition operations to locations that make sense for their business opportunities while taking care of all their operational needs. With over 70 years of experience leading industrial operations in Mexico, it is the best strategic partner for any potential transitions into the American market. Contact us and take the first step towards expanding your business into a new realm of possibilities.