Mexico has the opportunity to become the new China in an era where outsourcing does not mean moving production thousands of miles away. Major economies now, as mentioned in a related article moneyreview.grdecided to bring their factories closer together. In addition, the cheapness of labor that China counted on to become the “world’s factory” now looks like a myth. There, over the past ten years, wages in the industrial sector have more than tripled, so the average factory worker was earning about $6 an hour in 2020. Conversely, in Mexico, which is just a breath away from the border with the United States, the average factory worker was earning just over $2 an hour, while that wage has barely fluctuated over the past decade, according to US bank Bank of America. . . Meanwhile, wage growth in China is a one-way street as new labor market entrants shrink as a result of the country’s one-child policy from the late 1970s until 2016.

The reason is low wages combined with proximity to the huge American market.

While low wages have always been a factor that has attracted factories to Mexico, coupled of course with proximity to the huge US market, the pandemic seems to have accelerated this trend – supply chain problems have forced companies to diversify the system to secure their supplies. Mexico’s manufacturing sector has grown more than 5% this year in real terms, and Bank of America speaks of a “lifetime opportunity” for those looking to invest in the country and companies operating there. If Mexico takes full advantage of the opportunity to relocate factories, it could increase its exports by 30 percent, or about 9 percent of GDP, in the coming years, bank analysts said. And this at a time when more and more American companies are deciding that doing business in China is no longer worth it. However, outside of Mexico, Bank of America estimates that this trend is also favorable for countries such as Taiwan, Korea, Malaysia, Indonesia and India.