Nearshoring
Assembly Line
🇲🇽 The city where Mexico’s nearshoring hype is becoming reality
Monterrey, a business-friendly city a few hours’ drive from Texas, is a bellwether for Mexico’s ability to reap the rewards of nearshoring — a shift that is taking place thanks to the coronavirus pandemic, trade tariffs between the US and China, and geopolitical instability since Russia invaded Ukraine. “A week doesn’t go by for us without meeting Chinese, Korean, Japanese executives, looking to open offices or a plant,” said Lorenzo Barrera Segovia, chief executive of Banco Base, a bank based in the city.
“Monterrey and the rest of the country has a deficit in terms of planning… in terms of giving a strategic direction to economic growth,” said Roberto Durán, professor at the Tecnológico de Monterrey university. Unresolved national structural problems — such as corruption and the lack of competition in the economy — cause some observers, like Jason Tuvey, emerging markets economist at Capital Economics, to doubt that the external forces will be transformative for Mexico.