Mexico Drowning in Chinese Floaties
The United States isn’t the only country being undercut by cheap imports from China these days. Increasingly Mexico, a country not long ago many Americans blamed for stealing away U.S. manufacturing jobs with its cheap labor, is feeling the squeeze from the Far East.
Inflatable beach and pool toys are the latest market where Mexican producers find themselves unable to compete both nationally and internationally with cheaper imports from China.
Indeed, many of the beach balls, floaties, swimmies, life preservers, and inflatable rafts one finds for sale in the markets around beach towns like Acapulco, Puerto Vallarta, and Cancun are, in fact, made in China.
A simple Chinese produced inflatable life preserver can cost as little as 10 pesos (less than a dollar) while Mexican produced products generally cost upwards of 46 pesos (around four dollars).
Mexico’s main local producer, Beach Toys, finds it difficult to compete with the Chinese and has instead adopted a strategy of focusing on producing higher-quality products with recognizable brands such as Disney and Spider Man, for which they have licensing agreements that the Chinese currently don’t.
As Eduardo Martínez, president of the National Association of Plastic Industries (Anipac), lamented “[t]he sale price [of the Chinese goods] is really close to the cost of production, making it very difficult for Mexicans to compete.”
Chinese plastic toys and inflatables are imported to Mexico, in large part, by a company called Comercializadora México Americana.
The plight of Mexico’s floaties is representative of the larger issue facing Mexico as China displaces demand for Mexican manufacturing both abroad and at home.
According to the World Bank, in 2010 Mexico had an annual per capita GDP of $15,121 USD while China registered about half that at $7,536 USD per person.