MEXICO CITY (Reuters) - Mexico’s large trade deficit with China is a concern and the two nations will seek ways to correct it when their leaders meet next week, a senior Mexican official said on Friday.
Mexico ran a slight surplus with its global trading partners last year, but posted a massive deficit with China, largely due to an influx of manufactured goods.
More than 15 percent of Mexico’s imports came from China in 2012 - an amount worth $57 billion - while just 1.5 percent, or $5.7 billion, of Mexican exports went to the Asian giant.
Chinese President Xi Jinping arrives in Mexico next week and Mexican deputy foreign minister Carlos de Icaza said tackling the trade deficit would be high on the agenda.
“We believe Mexico and China need to work to create the conditions that allow trade and investment flows to increase between the two sides and, above all, to correct the strong imbalance in the trade balance,” he told Reuters.
“The trade imbalance is an area of concern without any doubt and work must be done to resolve it,” he said.
In an interview with the Mexican newspaper Excelsior published on Friday, Xi said China was willing to listen if Mexico wanted to deepen trade ties.
“Were the Mexican side to propose tackling the creation of a free trade zone with China, the Chinese side is ready to reinforce the possibility of working with the Mexican side on this,” Xi said, according to the Spanish text of his comments.
Mexico and China have no free trade agreement and when asked about Xi’s remarks, de Icaza said Mexico wanted to strengthen relations with China, but that any trade talks would be a matter for the Economy Ministry to decide.
The Economy Ministry had no immediate comment.
Xi will visit Mexico between June 4 and 6 where he will meet with President Enrique Pena Nieto and business leaders.
Mexico and China have been direct competitors to supply the U.S. market with manufactured goods and Mexican producers have fought to keep the Chinese off their turf.
In recent years, Mexico has regained U.S. market share as the labor cost differential with China has narrowed sharply, eating into a Chinese cost advantage.
A decade ago, Mexico’s average labor costs were nearly three times higher than China’s but, according to at least one report this year, hourly wages in Mexico are now lower.
Mexico is part of the Trans-Pacific Partnership negotiations, which aim to boost trade between the Americas, Asia and Australasia. The talks include the United States, Canada and a number of other major economies on the Pacific rim.
China said on Thursday it would study the prospect of joining the Trans-Pacific Partnership negotiations.
Reporting by Dave Graham and Simon Gardner; editing by Christopher Wilson