October 20, 2017

Country at a Crossroads: For Migrants, New Land of Opportunity Is Mexico

Rising wages in China and higher transportation costs have made Mexican manufacturing highly competitive again, with some projections suggesting it is already cheaper than China for many industries serving the American market. Europe is sputtering, pushing workers away. And while Mexico’s economy is far from trouble free, its growth easily outpaced the giants of the hemisphere — the United States, Canada and Brazil — in 2011 and 2012, according to International Monetary Fund data, making the country more attractive to fortune seekers worldwide.

The new arrivals range in class from executives to laborers; Mexican officials said Friday that residency requests had grown by 10 percent since November, when a new law meant to streamline the process took effect. And they are coming from nearly everywhere.

Guillaume Pace saw his native France wilting economically, so with his new degree in finance, he moved to Mexico City.

Lee Hwan-hee made the same move from South Korea for an internship, while Spanish filmmakers, Japanese automotive executives and entrepreneurs from the United States and Latin America arrive practically daily — pursuing dreams, living well and frequently succeeding.

“There is this energy here, this feeling that anything can happen,” said Lesley Téllez, a Californian whose three-year-old business running culinary tours served hundreds of clients here last year. “It’s hard to find that in the U.S.”

The shift with Mexico’s northern neighbor is especially stark. Americans now make up more than three-quarters of Mexico’s roughly one million documented foreigners, up from around two-thirds in 2000, leading to a historic milestone: more Americans have been added to the population of Mexico over the past few years than Mexicans have been added to the population of the United States, according to government data in both nations.

Mexican migration to the United States has reached an equilibrium, with about as many Mexicans moving north from 2005 to 2010 as those returning south. The number of Americans legally living and working in Mexico grew to more than 70,000 in 2012 from 60,000 in 2009, a number that does not include many students and retirees, those on tourist visas or the roughly 350,000 American children who have arrived since 2005 with their Mexican parents.

“Mexico is changing; all the numbers point in that direction,” said Ernesto Rodríguez Chávez, the former director of migration policy at Mexico’s Interior Ministry. He added: “There’s been an opening to the world in every way — culturally, socially and economically.”

But the effect of that opening varies widely. Many economists, demographers and Mexican officials see the growing foreign presence as an indicator that global trends have been breaking Mexico’s way — or as President Enrique Peña Nieto often puts it, “the stars are aligning” — but there are plenty of obstacles threatening to scuttle Mexico’s moment.

Inequality remains a huge problem, and in many Mexican states education is still a mess and criminals rule. Many local companies that could be benefiting from Mexico’s rise also remain isolated from the export economy and its benefits, with credit hard to come by and little confidence that the country’s window of opportunity will stay open for long. Indeed, over the past year, as projections for growth have been trimmed by Mexico’s central bank, it has become increasingly clear to officials and experts that the country cannot expect its new competitiveness to single-handedly move it forward.

Article source: http://www.nytimes.com/2013/09/22/world/americas/for-migrants-new-land-of-opportunity-is-mexico.html?partner=rss&emc=rss

For Migrants, New Land of Opportunity Is Mexico

Rising wages in China and higher transportation costs have made Mexican manufacturing highly competitive again, with some projections suggesting it is already cheaper than China for many industries serving the American market. Europe is sputtering, pushing workers away. And while Mexico’s economy is far from trouble free, its growth easily outpaced the giants of the hemisphere — the United States, Canada and Brazil — in 2011 and 2012, according to International Monetary Fund data, making the country more attractive to fortune seekers worldwide.

The new arrivals range in class from executives to laborers; Mexican officials said Friday that residency requests had grown by 10 percent since November, when a new law meant to streamline the process took effect. And they are coming from nearly everywhere.

Guillaume Pace saw his native France wilting economically, so with his new degree in finance, he moved to Mexico City.

Lee Hwan-hee made the same move from South Korea for an internship, while Spanish filmmakers, Japanese automotive executives and entrepreneurs from the United States and Latin America arrive practically daily — pursuing dreams, living well and frequently succeeding.

“There is this energy here, this feeling that anything can happen,” said Lesley Téllez, a Californian whose three-year-old business running culinary tours served hundreds of clients here last year. “It’s hard to find that in the U.S.”

The shift with Mexico’s northern neighbor is especially stark. Americans now make up more than three-quarters of Mexico’s roughly one million documented foreigners, up from around two-thirds in 2000, leading to a historic milestone: more Americans have been added to the population of Mexico over the past few years than Mexicans have been added to the population of the United States, according to government data in both nations.

Mexican migration to the United States has reached an equilibrium, with about as many Mexicans moving north from 2005 to 2010 as those returning south. The number of Americans legally living and working in Mexico grew to more than 70,000 in 2012 from 60,000 in 2009, a number that does not include many students and retirees, those on tourist visas or the roughly 350,000 American children who have arrived since 2005 with their Mexican parents.

“Mexico is changing; all the numbers point in that direction,” said Ernesto Rodríguez Chávez, the former director of migration policy at Mexico’s Interior Ministry. He added: “There’s been an opening to the world in every way — culturally, socially and economically.”

But the effect of that opening varies widely. Many economists, demographers and Mexican officials see the growing foreign presence as an indicator that global trends have been breaking Mexico’s way — or as President Enrique Peña Nieto often puts it, “the stars are aligning” — but there are plenty of obstacles threatening to scuttle Mexico’s moment.

Inequality remains a huge problem, and in many Mexican states education is still a mess and criminals rule. Many local companies that could be benefiting from Mexico’s rise also remain isolated from the export economy and its benefits, with credit hard to come by and little confidence that the country’s window of opportunity will stay open for long. Indeed, over the past year, as projections for growth have been trimmed by Mexico’s central bank, it has become increasingly clear to officials and experts that the country cannot expect its new competitiveness to single-handedly move it forward.

Article source: http://www.nytimes.com/2013/09/22/world/americas/for-migrants-new-land-of-opportunity-is-mexico.html?partner=rss&emc=rss

I.M.F., Predicting Slower Growth for China, Urges Overhauls

HONG KONG — The International Monetary Fund on Wednesday trimmed its growth forecast for China, flagged concerns about the rapid expansion in lending in the country’s vast economy and urged a “decisive” push for overhauls it argues would put the economy on the path toward sustainable growth.

The lowered forecast — the I.M.F. shaved a quarter of a percentage point off its previous projection for 8 percent growth in China, to 7.75 percent — was the latest in a string of similar reductions by analysts in recent weeks. And although the new projection remains above the Chinese government’s target of 7.5 percent growth, the I.M.F.’s revision and comments underlined the challenges facing policy makers as they try to revamp the world’s second-largest economy after the United States.

Chinese government data for the first quarter of the year showed that the pace of economic growth had slowed to 7.7 percent — markedly below what most analysts had expected. Other economic data for April and May also have been lackluster.

In the short term, recent credit expansion, combined with a mild pickup in the global economy, is expected to lift China’s growth rate in the second half of this year, the International Monetary Fund said after concluding an annual review of the Chinese economy.

But longer term, major efforts are needed to rebalance the economy and address problems like soaring income inequality and environmental degradation, which built up amid the headlong expansion of the past few decades.

The rapid growth in credit in recent years also has emerged as a major source of concern among analysts, who worry that the accumulation of debt brings substantial risks, including asset price bubbles and potentially destabilizing defaults.

The I.M.F. added its voice to the chorus of warnings about the so-called shadow-banking system — lending outside the regulated banking system, which has been growing rapidly in the past few years.

The growth in credit, the I.M.F. said, “raises concerns about the quality of investment and its impact on repayment capacity, especially since a fast-growing share of credit is flowing through less-well supervised parts of the financial system.” Growth, it added, has become “too dependent on the continued expansion of investment, much of it by the property sector and local governments whose financial position is being affected as a result.”

Policy makers in Beijing are well aware of these issues and are aiming to bring about more balanced, higher-quality growth that will improve living standards and household incomes.

The I.M.F. said it was “reassured” by the authorities’ focus on the financial sector and fiscal reforms, adding that “reining in total social financing growth is a priority and will require further tightening of prudential oversight.” Such policies may slow activity in the short term, the I.M.F. said, but they would do so “in a way that supports the transition to a more sustainable growth path.”

While China still has “significant policy space and financial capacity to maintain stability” the I.M.F. said, “the margins of safety are narrowing” and a “decisive impetus to reforms is needed to contain vulnerabilities and move the economy to a more sustainable growth path.”

Article source: http://www.nytimes.com/2013/05/30/business/global/imf-predicting-slower-growth-for-china-urges-overhauls.html?partner=rss&emc=rss

Housing and Auto Sales Lifted Economy, Fed Says

WASHINGTON (AP) — A strengthening housing recovery and robust auto sales contributed to moderate economic growth across the United States in late February and March, according to a Federal Reserve survey released Wednesday.

Growth was moderate or modest in all of the Fed’s 12 banking districts, and it accelerated in two — New York and Dallas — from January and early February.

The survey suggested that the economy performed better in March than some government data on hiring and consumer spending had indicated. That could mean the economic weakness might have been temporary.

The Fed survey, which is based on anecdotal reports, found that hiring was unchanged or improved slightly compared with the previous report. And it noted that consumer spending — which drives most of the economy — grew modestly. But the report also said higher taxes and a spike in gasoline prices had slowed sales.

By contrast, the Labor Department said earlier this month that job growth slowed sharply in March. And retail sales declined in March by the most in nine months, a separate report said last week.

Dana Saporta, an economist at Credit Suisse, said the survey was “consistent with the larger picture of steady if unspectacular growth.”

“We get caught up in the monthly volatility of the data, and we need to step back,” she said.

Zach Pandl, an economist at Columbia Management, an investment firm, said the rosier tone of the survey was probably a reason that several Fed policy makers recently expressed optimism despite sluggish economic data.

The Fed survey said the recovery in home construction was gaining momentum and creating more construction jobs. It is also increasing factory output of housing-related goods, like lumber.

The report did note some weak spots. Several districts said manufacturers of military-related goods had cut jobs in response to government spending cuts that started taking effect March 1.

Still, it said that overall growth was moderate, an upgrade from the “modest to moderate” pace in the previous two reports.

The Fed report, called the beige book, provides an overview of economic conditions from Feb. 22 through April 5. The information will be discussed along with other economic data during the Fed’s next policy meeting on April 30 and May 1.

At that meeting, most analysts expect the Fed to maintain its low interest rate policies but take no new steps. The Fed is expected to stick with its plan to keep short-term interest rates at record lows at least until unemployment falls to 6.5 percent. And it will most likely continue buying $85 billion a month in Treasury and mortgage bonds to try to keep long-term rates low and encourage borrowing, spending and investing.

Debate has heated up among Fed policy makers about when to start curtailing the bond-buying program, which began last fall. At their last meeting March 19-20, a majority of Fed officials said they favored continuing the bond purchases at least through the middle of this year. But many members indicated that they want to start winding down the program before the end of the year, as long as hiring and the economy continued to improve.

Since that meeting, some government reports had suggested that the economy weakened in March. Employers added only 88,000 jobs in March, a sharp slowdown from average gains of 220,000 in November through February. And consumers cut back on spending at retail stores and restaurants last month, a sign that higher Social Security taxes might have made more Americans cautious about spending.

Article source: http://www.nytimes.com/2013/04/18/business/economy/housing-and-auto-sales-lifted-economy-fed-says.html?partner=rss&emc=rss

Encouraging Numbers, at First Glance

During the recession, the state’s unemployment rate never reached the double-digit peak suffered by the nation as a whole. Since the recovery began, it is among a handful of states whose rate has fallen at a faster clip than most other states. Minnesota’s rate is now 6.6 percent, well below the 9 percent across the country.

Farmers in the state’s large agricultural sector have benefited from surges in the prices for their corn and soybeans. Among big companies with headquarters in the state, 3M and General Mills have recently reported strong earnings growth, and Target and United Healthcare are hiring.

Dig a little, though, and the foundation looks wobblier. Economists point out that some of the drop in state unemployment merely reflects people giving up on the job search or retiring early, as well as an aging work force with fewer young people hunting for jobs.

“It really seems slow here,” said David Vang, an economist at the Opus College of Business at the University of St. Thomas. “So if we’re rapid, other places must be terrible.”

Many people look to Minnesota as a state whose demographics, varied industries, educated citizenry and public policy could together provide a bit of a shield against hard times. But a closer inspection shows a disconnect between the more encouraging economic data of late and the harsher reality that people so often describe, here and across the country.

According to government data, which show that state unemployment peaked at 8.5 percent in the downturn, employers slashed roughly 154,000 jobs but have added back fewer than 27,000 — or only about 18 percent of those lost.

Big local employers including Medtronic, a medical device maker, and Hutchinson Technology, which makes components for disk drives, have announced layoffs in recent weeks. Small to medium-size companies say they are nervous about government policy and are reluctant to hire.

A depressed real estate market remains a drag on the local economy — as it does in many other places. In March, foreclosed homes made up more than 40 percent of sales in the Twin Cities. Construction workers have been idle for years, with little hope of imminent work. And the state government must resolve a $5 billion budget shortfall that some fear will lead to job cuts.

Over all, the nation continues to face a battery of economic challenges. Last week’s employment data showed a welcome bit of job creation for several months’ running, but other recent reports have been more lackluster. Unemployment insurance claims have been running at a higher level, and the main association of small businesses said it expected hiring to be sluggish.

Minnesota has some ability to outpace the rest of the country, with its tilt toward medical and food manufacturing and agricultural strength.

“In some ways it looks like it’s doing a little bit better,” said Terry J. Fitzgerald, senior economist at the Federal Reserve Bank of Minneapolis. “But not a lot better.”

Still, part of the reason Minnesota’s headline unemployment rate may have shown more rapid improvement is that it has fewer young people competing for jobs. According to Thomas Stinson, the state economist and a professor at the University of Minnesota, the proportion of workers in the 20-to-40 age group has slid from nearly half in the 1980s to about 38 percent now.

The people in the 40-to-60 age group, Mr. Stinson said, “are the people whose 401(k)’s got hit so hard and whose housing values have gotten hit so hard. So part of the reason for the slow recovery is that people are not spending, but are rebuilding their 401(k)’s. And we haven’t seen the release of pent-up demand that we would have normally seen” after a recession.

The state also faces many of the same trends that hamper job growth elsewhere. To the extent they are hiring, companies like 3M and General Mills are adding more people abroad than domestically. Connie Pautz, a spokeswoman for Hutchinson Technologies, which will cut about 600 people — or nearly half its Minnesota staff — over the next 12 months, said the company had automated much of its operations. “So we don’t need as many people,” she said.

Article source: http://feeds.nytimes.com/click.phdo?i=87f177982d667a8e71adec134802fa61