BRIC to MINT: Why China and Mexico Will Remain Strong Despite Slowing

Despite potential slowdowns, both countries will be strong for years to come

Feb 17, 2014 at 10:51AM

This article is the last in a series examining parallels between BRIC (Brazil, Russia, India, China) countries and the "emerging markets" of the MINT (Mexico, Indonesia, Nigeria, Turkey) community. This article looks at the final pairing, China and Mexico, and why they have the best chance of becoming strong economic powers in the long term.

There's one success story in every group. With China consistently declared the next world economic leader, the BRIC crown is easily claimed. What may be surprising is that Mexico is representing the MINT community. In a system that has been marred by corruption allegations and exists under the shadow of political instability, economic conditions indicate that the country is poised to continue its market successes and continue to grow despite these challenges. 

Why China will be strong in the long term
Despite what negative press may say, the Chinese economy will long be dominant. While some claim recent economic slowdowns are indicative of a failing market model, China's recent commitment to market reform (see my article on Likonomics) shows a focus on a long-term growth strategy that has not been seen in any of the other BRIC nations. How is this possible with a economy known for its relative rigidity?

It could be because China has seen the proverbial writing on the wall and is attempting to liberalize its markets. The recent Likonomic reforms, taking a more "hands-off" approach to the economy, mean a more fluid system that is able to easily adapt to conditions. However, this fluidity is useless when one considers how cheap the renminbi is comparative to other currencies. (Cheaper currency means prices set far too low and high exports.) 

This is not always a good thing, especially considering the eventual trade imbalance that will occur from a consistent trade surplus against other economies. A surplus now may result in the importing country decreasing imports in the long term (due to decreased purchasing capital over time.)

To combat this potential scenario, China has been easing banking and trade restrictions. In places like Shanghai, China has been exploring options that will slowly raise the market value of the renminbi and increase prices of Chinese goods.

Coupling market decisions like this with an ongoing effort to combat corruption, China's continued and future success is strengthened by the country proactively responding to market conditions.

Copying an effective strategy
Mexico seems to be moving along the same path. Recent reforms in energy policy have been moving to secure cheap energy for planned productivity surges in the near future. Mexican goods have been getting cheaper comparative to its greatest competitor, China. In part due to China's efforts, Mexico has been enjoying a few new waves of revenue lost to China a decade ago. 

All is not being handed to Mexico on a plate, however. Crime and instability are very real issues in the country. In the case of the former, over 60,000 have been killed in drug-related violence alone. Accompanying claims of state corruption does present a unique set of challenges, as most of Mexican industrial production is in the north of the country, which is in the heart of drug cartel territory.

Still, Mexico seems to be following China's lead. While not specifically following a state-directed economy, the government is taking a hands-off approach with the market, at least in regards to the macro-economic vision of the state. 

Corruption is also being attacked by the government as well. By taking on alleged embezzlers such as controversial education union leader Elba Esther Gordillo, the government shows a willingness to both adapt to current conditions as well as attack the underlying causes for previous economic retarding.

While the Mexican peso has long been a punchline when compared to most world currencies, there are indications that the peso is poised to rise as long as there is positive economic growth. That growth does not seem to be slowing anytime soon.

Birds of a feather
There are a laundry list of reasons that both countries have the potential to be strong for a long time to come, but there are common characteristics that link the two. Despite historically central governments, both administrations are showing that they can react proactively to address potential future economic concerns. This level of responsiveness, while debatable, is one that has not been conclusively evidenced in any other BRIC or MINT country. 

Both countries share commonality in the choice of trading partners as well. While more true for Mexico than for China, both states are major trading partners with the United States. This is not to suggest that only major trade partners of the U.S. can succeed economically in the long term, of course. However, the countries are two of the top three exporters to the U.S. Attaching an economy to the current world leader certainly cannot hurt the bottom line.

At the end of the fiscal year, Mexico and China face significant challenges that are varied. Regardless, current circumstances cannot hide the fact that these two countries have the staying power to remain economically strong well into the future.

Birds of a feather flock together. So do economies. 

The other parts in the series:

 Are the MINT Countries the New BRIC?

 BRIC to MINT: Are Nigeria and Russia Too Corrupt to Grow?

 BRIC to MINT: Are Brazil and Turkey Headed for Bankruptcy?

 BRIC to MINT: Why India and Indonesia Could Both Be Bankrupt in 10 Years

The next step for you

Want to figure out how to profit on business analysis like this? The key is to learn how to turn business insights into portfolio gold by taking your first steps as an investor. Those who wait on the sidelines are missing out on huge gains and putting their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you what you need to get started, and even give you access to some stocks to buy first. Click here to get your copy today -- it's absolutely free.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers