International Market Development

International market development | Comprehensive analysis of Mexico's economy and market conditions

Author : Bozhou Marine

Update time : 2020-12-25 13:38:30

In this article, we mainly introduce the basic situation of the Mexican market. Including: geographic location, major cities, population status, ethnicity, major festivals, natural resources, major industries, GDP, foreign exchange reserves, employment status, prices, corporate income tax, personal tax rates, etc.

  Introduction

The United Mexican States (Spanish: Los Estados Unidos Mexicanos), referred to as Mexico, is a federal republic in North America. It borders the United States to the north, the Pacific Ocean to the south and west, and the Caribbean Sea to the southeast, bordering Belize and Guatemala. To the east is the Gulf of Mexico. With an area of 1964,375 square kilometers, it is the fifth largest country in the Americas and the fourteenth largest country in the world.

Mexico is a free market economy, with modern industry and agriculture, and the proportion of the private economy has increased significantly. After the formal establishment of the North American Free Trade Area in 1994, trade and investment exchanges between Mexico and the United States increased rapidly, which greatly promoted economic development and increased national income.

  Capital

Mexico City (English: Mexico City) is the capital of Mexico. It is located in a valley in the south-central Mexico plateau at an altitude of 2,240 meters. It and the surrounding satellite cities are divided into a federal administrative region, called the Mexican Federal District (Distrito Federal).

Mexico City covers an area of 1,525 square kilometers and has a population of approximately 22 million (including satellite cities, as of January 2019). It is the most populous metropolitan area in the Americas and the highest in the world. It concentrates about 1/2 of the country's industrial, commercial, service, and banking financial institutions. It is the political, economic, cultural and transportation center of the country, and it is also a famous international metropolis.

  Main City

1. Mexico City

Mexico City is not only the capital, but also the largest city in Mexico. Architectural buildings, historical sites, museums, palaces, monuments, shopping malls, government buildings, everything in Mexico City. About one-fifth of the Mexican population lives in Mexico City, so this city is also known as the city that never sleeps.

Mexico City - Photo | Google

2. Guadalajara

Guadalajara is the second largest city in Mexico and the capital of the state of Jalisco. The core of Mexico’s cultural roots can be found in this city because it is the production center for most authentic Mexican products.

3. Monterrey

Monterrey is the capital of Nuevo León and the third largest city in Mexico. The city is famous for beautiful caves such as "Grutas de Garcia", and the world-famous waterfall "Cascada Cola de Caballo" that looks like a pony tail. In addition, in addition to art galleries, museums, forests, and monuments, Monterrey is also home to Mexico’s industrial capital and some large industrial headquarters.

Monterrey - Photo | Google

4. León

Leon is the capital of Guanajuato and another major city in Mexico. Expiatorio, also known as the Atonement Sanctuary of the Heart of the Holy Jesus, is one of the famous scenic spots designed by Leon's neo-gothic architecture. The Municipal Palace and the Arch of Heroes' Coronation are also symbols of this city. Leon has an international reputation for producing high-quality leather (especially leather shoes).

5. Puebla

Puebla is the capital of the state of Puebla and the main industrial center of Mexico. In the past, it was only known for the textile industry. Today, Puebla is also a commercial center for the automotive and steel industries. Puebla is located in a picturesque valley surrounded by mountains and volcanoes. Puebla is also famous for its cultural heritage ranging from Renaissance, Classical to Baroque historical monuments. Art museums, churches and antique shops also make it an attractive tourist attraction.

Puebla - Photo | Google

  Jet Lag

Mexico, the local normal time is 14 hours slower than Beijing time. After subtracting 14 hours from Beijing time, it is the local normal time in Mexico.

Mexico Daylight Saving Time: From the first Sunday in April to the last Sunday in October. Daylight saving time is one hour more than normal time.

  Population and Ethnicity

The population is 123 million (2017). Indo-European and Indians make up more than 90% of the total population.

  Language

Spanish is the main language.

  Main Holiday

New Year's Day / January 1st; Nuevo Western New Year;
February 5th, the Constitution Day / Día de la Constitución Mexicana / The Mexican Constitutional Assembly passed the Constitution in 1917;
March 21st / Natalicio de Benito Juárez / the birthday of the Mexican patriot Benito Juárez, also means the beginning of spring;
April 6th / Thanksgiving / Viernes Santo Good Friday, the Friday of the 40th day from March 1st of that year is Thanksgiving;
May 1st / Labor Day / Día del Trabajo Labor Day;
May 5th / Cinco de Mayo / The anniversary of Cinco de Mayo's defeat of France in 1862;
September 16th / Día de independecia / Independence Day / became independent from Spain in 1810;
November 20th / Revolution Day / Dia de la Revolución / commemorates independence under Spanish rule in 1816;
December 25th / Christmas Day / Navidad / Nativity Day (also known as Christmas).

Día de independecia - Photo | Google

  Natural Resources

Mexico is a major economic power in Latin America and an important mining producer in the world. Mexico’s main energy mineral resources include oil, natural gas, uranium and coal; metal minerals include iron, manganese, copper, lead, zinc, gold, silver, antimony, mercury, tungsten, molybdenum, vanadium, etc.; non-metallic minerals include sulfur, Graphite, wollastonite, trona, fluorite, etc. The world’s top mineral reserves are: silver ranks first in the world; copper and graphite rank third in the world; sulfur and barite rank sixth in the world; molybdenum, lead and zinc rank seventh in the world; manganese Ranked 11th in the world.

Oil and gas resources are Mexico’s most important mineral resources. According to the statistics of the Mexican Ministry of Economic Affairs, as of the end of 2011, Mexico’s remaining proven recoverable oil reserves were 2.062 billion tons, ranking 18th in the world; the remaining proven recoverable reserves of natural gas were 332.514 billion Cubic meters, ranking 31st in the world; conventional oil recoverable resources of 11.4 billion tons, ranking 8th in the world; conventional natural gas recoverable resources of 5.53 trillion cubic meters, ranking 13th in the world. In addition, Mexico has 3.8 billion tons of oil resources to be discovered, and 1.32 trillion cubic meters of natural gas.

Mexico is an important producer of non-metallic minerals in the world. According to statistics from the National Bureau of Statistics of Mexico, the output value of non-metallic mining in 2012 was about 13.4 billion pesos (approximately US$1.02 billion), of which the proportion of non-metallic minerals was: fluorite 23 %, salt 16%, sulfur 14%, silica sand 13%, calcium sulfate 10%, phosphocalcite 9%, gypsum 4%, and other 11%. In 2012, the output of non-metallic minerals increased significantly, such as silica sand, gypsum, and celestite.

  Major Industries

Petrochemical Industry

Mexico is the world's ninth and second largest crude oil storage country in the Western Hemisphere.

In addition to crude oil refining, asphalt product manufacturing, lubricating oil, grease and other coal and refined petroleum derived products, the Mexican chemical industry also includes basic chemicals, resins and synthetic rubbers, fibers, fertilizers, pesticides and other agricultural chemicals. Pharmaceutical products, paints, coatings and adhesives, soaps and detergents, printing inks, explosives, plastics and rubber, etc. The industry's contribution to manufacturing GDP was 8.6%, creating 160,000 jobs, accounting for 4.8% of the total manufacturing employment.

Automotive Manufacturing

The automobile industry is Mexico’s largest manufacturing sector and one of the most active pillar industries. Mexico is currently the seventh largest automobile manufacturer and fourth largest exporter in the world. The export market is mainly the United States, and its share in Latin America has also increased year by year.

Two of the leading auto production plants in North America are located in Mexico, Volkswagen in Puebla and Nissan in Aguascalientes. In 2012, the total output of these two plants exceeded one million vehicles.
There are about 600 existing parts and components companies in Mexico, of which about 230 are foreign-invested bonded processing plants, about 250 are manufacturers of original auto parts (mainly supplying components required by assembly plants in Mexico), and the rest are Domestic small and medium-sized parts manufacturers.

Home appliance industry

Mexico is one of the main suppliers of home appliances in the world. At present, Mexico is the world's second largest exporter of TV receivers, video monitors and video projectors, accounting for 17%, second only to China (28%).

Electronics industry

Mexico is an important global electronic product assembly and export country, and it is particularly competitive in the consumer electronics field. In 2012, the output value of the Mexican electronics industry was nearly 56 billion U.S. dollars, and the export value was close to 75.537 billion U.S. dollars, of which 84% was exported to the United States, followed by Canada, the Netherlands and China; the largest proportion of exports was computers-Mexico is the world The fifth largest exporter of computers, followed by flat-screen TVs and mobile phones.

Electrical industry

Mexico is the leading electrical manufacturer and main investment destination in Latin America, and the most important supplier of power generation and distribution equipment in the United States.

The main export market is the United States, followed by Canada, Nicaragua and Germany. The main export products are motors and generators, static converters, isolating switches, circuit breakers, lamps and other lighting equipment.

Mining

As a major economic power in Latin America and an important mining producer in the world, Mexico has rich mineral resources. The main metal minerals include iron, manganese, copper, lead, zinc, gold, silver, antimony, mercury, tungsten, molybdenum, vanadium, etc.; Metallic minerals include sulfur, graphite, wollastonite, trona and fluorite.

From the perspective of the distribution of mineral resources, nearly half of Mexico’s mineral resources are concentrated in the following four states: Sonora (14%), Coahuila (13%), Zacatecas (11%) and Du Lanco State (10%). Other major mineral resource states include Jalisco (7%), Baja California (6%) and Sinaloa (5%), while other regions are relatively few.

  The economy continues to slump, with negative growth for the first time

Mexico’s gross domestic product (GDP) totaled approximately US$1.259 trillion in 2019, ranking 15th in the world, shrinking by 0.1%. This is the first negative growth in a decade.

Mexico's GDP growth rate trend graph over the years | TRADING ECONOMICS

IMF World Economic Outlook: Mexico's GDP in 2020 is expected to fall by 10.5%.

Weak growth in foreign exchange reserves

Mexico's foreign exchange reserves trends over the years | TRADING ECONOMICS

Mexico’s foreign exchange reserves have been volatile in recent years, with a sharp decline in 2015 and slow growth in recent years.

Unemployment rate returns to high

Mexico Unemployment Rate Trends Over the Years | TRADING ECONOMICS

Due to the impact of the new crown pneumonia epidemic on Mexico’s economy, Mexico’s poor population may increase by 7.2% to 7.9%. If the specific figure is changed, the income of 8.9 million to 9.8 million Mexicans may fall below the poverty line.

Prices have continued to rise in recent years, and the inflation rate has fluctuated significantly

Mexico's Consumer Price Index CPI Trends over the Years | TRADING ECONOMICS

From 2011 to 2020, the growth of the Mexican consumer price index CPI accelerated, and prices continued to rise.

Mexico's inflation rate trend chart over the years | TRADING ECONOMICS

From 2011 to 2020, Mexico’s inflation rate fluctuated greatly, and it fell to a trough in 2016 and 2020, and the economic growth rate dropped significantly.

Corporate income tax 30%

Mexico corporate income tax trends over the years | TRADING ECONOMICS

In 2020, the Mexican corporate income tax rate is 30%.

Personal income tax 35%

Mexico Personal Income Tax Trends over the Years | TRADING ECONOMICS

In 2020, Mexico's personal income tax rate is 35%.

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