From John Paul Rathbone:
For the first time in a decade there are good reasons to be less bullish about China – and thus Brazil. There are also good reasons to be more bullish about the US – and thus Mexico. China has lost competitiveness because of rising wage and transport costs. North American corporate supply chains are already shortening. If the US economy recovers, Mexican manufacturers should do well.
Mexico has also become a global car producer. The industry generated $23bn of exports last year – more than oil or tourism. Nor are these cheapo maquiladora operations: Volkswagen and Nissan use Mexico’s web of trade agreements to export their cars to the whole world. As for Mexico’s “drugs war”, the once dizzying increase of violence has slowed and in some areas fallen. Why is not clear, but a 74 per cent increase in federal security spending will eventually make a difference, anywhere.
Read the whole thing, well argued throughout.