ACAPULCO, Mexico (Reuters) – U.S. President Donald Trump’s push to force U.S. industry to bring jobs home is opening investment avenues for Chinese companies in Mexico, an executive with Industrial and Commercial Bank of China (ICBC), the country’s largest lender, said on Friday.
Fears of a hit to foreign investment ran high when Ford Motor Co canceled a $1.6 billion plant in Mexico’s central state of San Luis Potosi in January.
Trump, who had railed against U.S. manufacturers investing in Mexico, hailed the decision as a major victory, but Ford put it down to declining demand for small cars.
Yaogang Chen, head of ICBC’s Mexico unit, said U.S. industry’s loss could be China’s gain.
“If some U.S. investment projects don’t (happen), there has to be somebody to invest. … If Chinese companies think it is profitable, they will invest,” he said in an interview on the sidelines of a banking conference in the resort of Acapulco.
In February, China’s Anhui Jianghuai Automobile Group Co Ltd (JAC Motor) and Mexico’s Giant Motors, along with distributor Chori Co Ltd, said they would invest over $210 million in an existing plant to build SUVs in the central state of Hidalgo.
Prior to Trump’s campaign against U.S. manufacturers shipping jobs overseas, Chinese companies were making tentative inroads into Mexico.
China’s BAIC Motor Corp Ltd <1958.hk> in June 2016 started selling in Mexico its own cars imported from China and has said that it will look into building an industrial plant in Mexico to produce cars and electric vehicles.
BAIC is already a client of ICBC’s in Mexico.
ICBC, one of the world’s top banks by market capitalization and assets, received its banking license in Mexico in 2014 and started operations there in mid-2016.
“JAC, we think, will be a client of ours in Mexico too,” Chen said.
Still, Chinese foreign direct investment in Mexico is a tiny fraction of what U.S. firms have plowed in over the years.
State-controlled ICBC expects to grow its assets and loan portfolio in Mexico tenfold over the next three years to some 10 billion pesos ($533 million), Chen said.
The executive said ICBC aims to offer a service to allow clients to convert Mexican pesos to Chinese renminbi and vice versa, and make cross-border transactions cheaper.