China's Xi in Mexico eyes 'strategic' partnership

MEXICO CITY (AFP) - Chinese President Xi Jinping on Tuesday kicked off a three-day visit to Mexico, which is seeking to narrow a huge trade gap with Beijing and attract investment from the world's number two economy.

Mexico is the third stop on a tour of Latin American and Caribbean nations that has already taken Xi to oil-rich Trinidad and Tobago, and Costa Rica, as Beijing looks to boost its deepening trade ties in the region.

At week's end, Xi travels to the United States for a much-anticipated summit with US President Barack Obama.

Xi held talks with Mexican President Enrique Pena Nieto, their second meeting in as many months after Pena Nieto's trip to Beijing in April.

"Your presence in Mexico will help bring fullness to a new phase of cooperation," Pena Nieto told his Chinese counterpart at a welcome ceremony at the Campo Marte military field.

"China and Mexico should ... acknowledge each other as strategic partners."

"I am convinced that with both countries joining efforts, China and Mexico's relations will begin a new stage of development," Xi replied.

Observers say Pena Nieto's recent trip to China, which came just four months after he took office, showed his desire to cast aside old trade rivalries in favour of a closer partnership.

China is Mexico's second-largest trading partner after the United States, and Mexico is Latin America's second largest economy after Brazil. Both countries are members of the Group of 20 leading economies.

The two sides are expected to sign 10 agreements in fields such as trade, investments, infrastructure, science and education.

But Mexico also wants to narrow a gaping trade deficit heavily tilted in China's favor: Mexico imported $57 billion worth of Chinese imports last year while exporting just $5.7 billion, according to the Mexican central bank.

"We are looking for ways to overcome the trade imbalance between China and Mexico and work together to create the conditions for these trade flows to be more balanced," Deputy Foreign Minister Carlos de Icaza said.

Xi, who arrived in Mexico after visiting Trinidad and Tobago and Costa Rica, suggested that China was willing to work with Mexico to reduce the gap.

"The Chinese side has never intentionally sought surplus in bilateral trade," he said in comments carried by China's Xinhua news agency.

China, he added, "is ready to join in efforts with the Mexican side to tap into potential, expand the scale and optimise the structure of bilateral trade and seek balance of trade in an active way."

Xi - who took office in March in a once-in-a-decade power transfer in communist-ruled China - even indicated that Beijing was willing to discuss the possibility of negotiating a free trade deal with Mexico.

China has expanded its trade and investment ties with Latin America in recent years as the world's second biggest economy taps into the region's mineral and oil wealth to fuel its economic growth.

Mexico however is not one of the primary recipients of Chinese investment - something Pena Nieto would like to change.

Tuesday evening, Xi - the first Chinese president to visit Mexico since 2005 - and his wife Peng Liyuan were to be the guests of honor at a gala dinner hosted by Pena Nieto and his wife, telenovela actress Angelica Rivera.

On Wednesday, Xi will deliver a speech to Mexico's Congress and meet with business leaders. A visit to the ancient Maya archeological site of Chichen Itza is planned for Thursday.

In Costa Rica, Xi and President Laura Chinchilla signed agreements on projects worth nearly $2 billion, including upgrades of an oil refinery, a key highway and public transport.

In Trinidad and Tobago, he met with leaders of English-speaking Caribbean nations.

Costa Rica and Mexico recognise Beijing, but the other six Central American countries maintain diplomatic relations with self-ruled Taiwan, which China considers part of its territory awaiting reunification, by force if necessary.

The two split in 1949 after a civil war.