The Mexican economy will boom in coming years as the United States reduces its reliance on Chinese-made products, billionaire businessman Carlos Slim predicted Wednesday.
Speaking at an event at the National Autonomous University (UNAM), Mexico’s richest person said that the U.S. has depended heavily on imports from China for over 20 years but will increasingly look to Mexico due to its “economic confrontation” with the world’s most populous country.
“The products they imported from [China] will have to be produced here,” Slim said.
The magnate said that the United States and Canada could increase their domestic manufacturing capacity, but asserted that only Mexico can compete with China on production costs.
Slim, the owner of companies such as Telcel, Sanborns and Carso Infrastructure and Construction, said that increased investment in manufacturing capacity in Mexico could spur annual economic growth of 6% or higher. Mexico hasn’t seen sustained growth at that level since the 1950s and ’60s, a period when successive governments pursued an economic strategy known as the “Mexican miracle.”
The nearshoring phenomenon is already benefiting the Mexican economy, and Slim believes that benefit will only grow.
“What I see for all of you is a prosperous Mexico with sustained growth, with a lot of opportunities for job creation and economic activities,” he told UNAM students.
Remarks made by Economy Minister Raquel Buenrostro this week support that view, as she said that more than 400 North American companies are planning to relocate to Mexico from Asia.
Slim said he was confident that Mexico will seize the opportunity, although Mexico’s nationalistic energy policies are seen as one barrier to investment.
“Public finances are healthy and will remain healthy until the end of this government, that’s important. I’m convinced that the coming years will be years of a lot of work and a lot of opportunities,” he said.
Slim also said that the North American free trade pact, the United States-Mexico-Canada Agreement, is an important factor in the economic success he envisions. The agreement, which took effect in 2020, allows tariff-free trade for a wide range of products provided certain conditions are met.
Slim also highlighted the importance of oil to the Mexican economy and noted that production is increasing once again.
“What I want to stress is that the world you’re going to get, … the world you’re going to live in will be one of a lot of work, a lot of investment and a lot of [economic] activity,” he told students.