The economy of Ciudad Juarez can benefit from the crisis in China and inflated logistics costs
4 min read
27 days ago

The economy of Ciudad Juarez can benefit from the crisis in China and inflated logistics costs

A recent panel discussion entitled “Industry as an engine of development in Mexico” took place within the recent Ciudad Juárez Vision Forum framework. During this informative discussion, economic and private sector leaders recognized that Mexico, in general, went through difficult times given the crisis that was caused by the global coronavirus pandemic. However, despite this fact,  panel participants recognized that despite the difficulties that continue to exist worldwide, the present time could represent a significant opportunity for the economy of Ciudad Juarez.

The economy of Ciudad Juarez and that of Chihuahua are in transition

At present, the state of Chihuahua and the economy of Ciudad Juarez both face a new panorama with the subsequent reopening of international crossings. In addition to this, there is a range of new opportunities given what is currently happening in China related to supply chain issues. Rodolfo Balmaceda, president of the real estate investment group, Uppsite, Adolfo Miramontes, president of the Chihuahua Aerospace cluster, and Eduardo León, general director of The Boston Consulting Group, were among the participants in this discussion. The expert panel was moderated by Eladio González, general editor of Grupo Expansión, who organized this event.

During his participation, Rodolfo Balmaceda observed that the current tariff confrontation between the United States and China, the increase in logistics costs, and the transition to renewable energies give Mexico and, specifically, the economy of Ciudad Juarez an enormous opportunity for growth and development. “That gives Mexico, by the weight of its manufacturing, an enormous opportunity. We, as entrepreneurs, must start creating different things. If we expect the government to create the conditions to take advantage of this historical moment, that will not happen,” he asserted. Further on in the panel discussion, Eduardo León commented that it is not possible to depend solely upon private initiative. However, he stressed that in issues of resilience, it is essential to anticipate what is coming and provide a greater degree of certainty for a positive return on investments. “I believe that at this juncture, taking into account the global perspective and seeing how Mexico and the economy of Ciudad Juarez can capitalize on this moment becomes very relevant,” he asserted. León gave the current chip crisis in the automotive industry as an example, and that this should lead the government and the private sector to move to more advanced manufacturing.

Aerospace executives have expressed an interest in the region

Adolfo Miramontes remarked that the aerospace industry was the most affected in the pandemic. He noted that industry experts predict that positive growth in the sector will not resume until 2024. But precisely in this transition to recovery, the state of Chihuahua and the economy of Ciudad Juarez has the potential to be the big winner because of their privileged locations. He communicated that recently executives of several well-known companies expressed their intention to move operations to Chihuahua. This is because they have not been able to make the most of their locations in China. The fact that Asian companies are looking to participate in the economy of Ciudad Juarez and the state of Chihuahua brings up another important issue. This is what is that industrial parks play?  At this point, the president of the real estate investment firm, Uppsite stressed that parks continue to develop as they did 40 years ago. However, he contends that this model is no longer sustainable and that current circumstances are forcing it to be redesigned. “Developers need to think more about innovation. They must create spaces where small and medium-sized enterprises can coexist.

He commented that in the economy of Ciudad Juarez, it is important to create these collaborative spaces for production, machine rental, and even for the exchange of talent and information. “High logistical costs from far away sites are here to stay for a while, so we have to take advantage of this situation in places like Juarez,” he went on to say. The panelists at the forum also commented that it is vital to encourage shipping companies to locate operations in Mexico by pointing out the country’s competitive advantages. Eduardo León concluded his commentary by stating that one way to advance the economy of Ciudad Juarez is to concentrate on increasing industrial activity and specialization. Doing so will promote the economic well-being of Chihuahua and Ciudad Juarez by improving both their professionalism and competitiveness.

Jose Grajeda

Chief Operating Officer

Jose Grajeda

Chief Operating Officer

Maquiladora operations expert, Jose A. Grajeda, is an integral member of the Tecma Group of Companies executive management staff.