Tuesday, November 11, 2014

China to Mexico: abide by what you sign

"President Xi Jinping and I have strengthened our political understanding, and we trust each other." Enrique Peña Nieto, in Beijing

Guadalajara -
At the Asia-Pacific Economic Cooperation (APEC) summit in Beijing today president Enrique Peña Nieto lobbied hard for Chinese investment in his country, which is struggling with far below projected economic growth for the second year in a row.

In route to the Chinese capital last weekend the president said his goal was to attract better paying jobs to Mexico, as well as infrastructure projects. But just five days ago Mexico abruptly canceled an almost $4 billion USD high speed rail contract which it signed earlier this year with an international consortium of seven builders, one of which is the China Railway Construction Company (CRCC).

The cancellation, prompted by Mexican press revelations about financing for a $7 million mansion owned by Angélica Rivera, the president's wife, dismayed Chinese authorities and placed stress on the countries' relationship at a critical moment.

But Peña Nieto tried to put his best spin on what was otherwise a public relations gaff at home and abroad.

He reminded Chinese leaders that 60,000 of their conationals visited Mexico in 2013, a 27% increase since 2012. "For that reason, tourism is a key point of our plan to strengthen economic cooperation between the two nations." Peña Nieto added that he wanted travel to move in both directions.

He also noted that Mexico ranks fourth worldwide as a purchaser of Chinese exports. "And more and more our economies complement one another. About 85% of what we import from China is used to manufacture our own exports to world markets."

Determined to placate his hosts, the Mexican president said he was "very respectful" of Chinese internal affairs - a remark clearly intended to deflect attention away from continuing complaints about Beijing's human rights abuses. "President Xi and I have strengthened our political understanding, and we trust each other," said Peña Nieto, without elaborating.

"We particularly recognize China's outstanding extraordinary growth based upon its high level of investment, its solid platform of exports and its recent strategy of strengthening internal markets," said Peña Nieto.

Economic experts have repeatedly cited the lack of such factors - coupled with endless domestic security concerns - as being responsible for Mexico's own anemic growth since the president took office on Dec. 1, 2012. Gross domestic product in this county expanded but 1.1% in 2013, and may barely clear 2% this year, far below the Latin American average.

The Chinese response to Mexico's beleaguered 48 year old president - who finds almost all of his widely praised economic and business accomplishments of a year ago eclipsed by an increasingly violent Mexican State, where nobody is safe - was a little less diplomatic.

Chinese Prime Minister and head of State Council Li Keqiang scolded Peña Nieto for cancelling the CRCC contract last week. "Deal fairly with what you commit to," he told the Mexican president, according to an article published today by the Xinhua News Agency, official mouthpiece of the People's Republic.

Spokesmen for Peña Nieto have said only that the rail contract was unilaterally terminated due to "doubts and confusion" which have arisen over the controversial deal, in which the consortium - which included the Mexican company Grupo Hilga - was the sole bidder. Hilga and its affiliates were awarded hundreds of millions of dollars in government contracts during Enrique Peña Nieto's term as governor of the State of Mexico (Edomex) in 2005-2011.

The rail project may be discussed in greater detail when the Mexican president meets a final time with Xi Jinping on Thursday. Chinese officials said they hoped the matter could be resolved as quickly as possible, suggesting the contract could yet be renegotiated and carried to completion.

June 6, 2013 - How do you say "Xi Jinping" in Spanish?

© MGR 2014. All rights reserved. This article may be cited or briefly quoted with proper attribution or a hyperlink, but not reproduced without permission.

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