Mexico and China compete to attract foreign direct investment especially from US multinationals. While labor in China is much cheaper than in Mexico, Mexico has many advantages over China. For example, China’s labor practices are much to be desired to say least. A few years ago a spate suicides by workers at Foxconn, a contract manufacturer of Apple(AAPL) in China led to the installation of anti-jumping nets in factories. Incidents such as this are the known cases. Nobody knows what other slavery-like conditions exist there and hidden from the outside world. Another factor that ethical investors would consider is that China is a communist state with a one-party rule. So by having factories in China some multinationals indirectly support the single party regime. Mexico on the other hand is a democracy despite having its own issues such as the violence of the drug cartels and corruption.

While researching the advantages of Mexico over China for manufacturing I had saved the following infographic. Though it is a bit old many of the reasons noted still applies.

Click to enlarge

Source: Co-Production International

Disclosure: No positions