In the Journals

November 8, 2012

China Displaces Mexican Manufacturing

“China desplaza a México en el sistema mundial de la maquila,” Juanita del Pilar Ochoa Chi, Papeles (Madrid), no. 115 (2011), 89–100.

China’s manufacturing boom, combined with its investment in hundreds of new factories in Mexico, is creating an “uncertain future” for the Mexican manufacturing industry, writes Juanita del Pilar Ochoa Chi, a sociologist at the National Autonomous University of Mexico. In 2003, China displaced Mexico as the leading supplier of manufactured products to the United States, a position that Mexico had held since the 1990s. Mexico now ranks third in this area, behind China and Canada.

According to Chi, the Mexican government has responded poorly to these developments. First, the administrations of Vicente Fox (2000–06) and Felipe Calderón (2006–12) sought to compensate for declining revenues from the export of manufactured goods with higher revenues from the export of natural resources. This increased Mexico’s dependence on foreign capital and led to legislation that weakens environmental protection, clearing the way for new offshore oil wells, open-pit mines, and the further privatization of water and forests. Today there are “large areas of the country that are militarized to silence any sign of discontent” over state-authorized exploitation of natural resources, writes Chi, noting that this militarization is done on the premise of fighting the failed War on Drugs.

Second, the Mexican government has failed to enact a national-development policy for the manufacturing industry, which has done little to develop the country while continuing to exploit and displace workers. For example, although manufacturing companies operating in Mexico spent an estimated $45 billion annually on materials, only 3% of that money was used to buy Mexican products. Similarly, while there are over 3,500 manufacturing facilities employing over 1.3 million Mexican workers, the average salary of the Mexican worker has deteriorated, dropping from 1982 to 2000 by nearly 76%, due in part to international competition from China.

Third, thanks to Mexico’s signing of the North American Free Trade Agreement (NAFTA) in 1994, the Mexican government is ill equipped to deal with the country’s economic subordination to China and to shift away from an export-based economy. According to Chi, NAFTA’s emphasis on export-dependent economies and lax government regulation of business and trade “dealt an irreparable blow to sovereign national productivity” and has failed to “guarantee the implementation of processes for the modernization of national production.”

Furthermore, although Mexico is working to attract new Chinese investment in the manufacturing industry—there are currently 375 Chinese companies established in Mexico—Chi questions whether this is a viable development plan. One key problem is that Mexico is heavily dependent on U.S. demand for its manufactured products. Since over 80% of Mexican manufactured products are sold in the United States, Mexico is vulnerable to U.S. market fluctuations. For instance, in the recession of 2009, demand for Mexican manufactured products collapsed, provoking mass layoffs as Mexican GDP plunged 6.2%.

As the Mexican government works to attract Chinese investment in manufacturing, Chi concludes with a warning: “[Mexico] should remember that the manufacturing export industry is a transnational mechanism that obeys a dynamic of overexploitation in a complex global economic mix, in which today the world population also has much to say.”



The Plunder of Panama’s Ngäbe-Buglé

“ ‘Non-histories’ of the Ngäbe and the Buglé,” Jorge Sarsanedas, Envío (Managua), no. 368 (March 2012), available at

The Ngäbe and the Buglé peoples of Panama made international headlines in February for their organized resistance to government-approved mining and hydroelectric projects that threaten to destroy their native lands. Some 5,000 indigenous protesters blockaded the Pan-American Highway for nearly a week. The ensuing clashes with Panamanian security forces left two Ngäbe-Buglé dead, and many more were injured or imprisoned. Sadly, this is only the most recent example in a long history of oppression of the Ngäbe-Buglé peoples, writes Jorge Sarsanedas, a member of Panama’s National Coordinator of Indigenous Pastors.

Panama’s seven indigenous tribes make up 12% of the country’s population, numbering over 421,000 people. The largest among them is the Ngäbe-Buglé, whose lands are rich in natural resources. Although the Panamanian government officially granted autonomous reserves to the Ngäbe-Buglé in 1997 in the northwest of the country, many Ngäbe-Buglé communities still lie outside their boundaries.

Sarsanedas—who has lived among the Ngäbe-Buglé peoples and can speak the Ngäbe people’s native language, Ngäbere—has witnessed many of the injustices committed against them by the government and foreign corporations. Sarsanedas recalls one day in March 1979 when a government minister told an audience of Ngäbe-Buglé that they would soon be awarded independent districts.

“What a dreamer I was to think governments give in so easily,” recalls Sarsanedas. “It would take 18 years to legalize even a small amount of the territory the Ngäbe people asked for.”

Sarsanedas notes that much earlier accounts also document the Ngäbe-Buglé peoples’ subjection to “plunder and racism” by people seeking to make a profit off their land. In September 1893, for example, a Panamanian bishop complained that the owner of a neighboring hacienda was exploiting local Indians and stealing their property. The hacienda owner had “taken all the ganayto plants from all the Indians neighboring his farm,” wrote the bishop. “He is trampling my family and has my people squeezed for no reason and is forcing the poor half-breed woman. . . . He has become rich with the sweat of the Indians.”

“These sound like modern complaints, not those of over a century ago,” reflects Sarsanedas, relating still more examples from the 1950s, when landgrabs of native territories were common. In some cases, Sarsanedas writes, Ngäbe-Buglé land was either purchased with a “denim blanket” or a “sack of salt” or it was seized because “it wasn’t being cultivated.”

According to Sarsanedas, racism against the Ngäbe-Buglé peoples has also permeated the Panamanian education system. State schools have historically discouraged native languages, with most educators unable to speak native tongues. Although in 2010 the government approved Law 88, which recognizes the languages and alphabets of Panama’s seven indigenous peoples, Sarsanedas questions whether educators on Ngäbe-Buglé reserves today are versed in the local dialects.

Sarsanedas concludes by emphasizing that the Panamanian government must consult indigenous groups on land use. Prior consultation, he points out, is a right enshrined in the International Labor Organization’s Convention 169, which the Panamanian government has failed to ratify. Until the Panamanian government recognizes indigenous groups’ right to prior consultation, its conflicts with the Ngäbe-Buglé peoples should be resolved in an open and honest dialogue “whose fundamental objective is an abundant life for everyone.”


Read the rest of NACLA's Fall 2012 issue: "#Radical Media: Communication Unbound."


Like this article? Support our work. Donate now.