Mexico Scraps China High Speed Railway Deal


Your end-of-week China links:

Remember the recent news that China Railway Corp won a $3.75 billion contract to build a high-speed rail line in Mexico? About that: AFP reports that Mexican President Enrique Pena Nieto has cancelled the deal, less than a week after it was announced. According to Mexican Transport Minister Gerardo Ruiz Esparza, Mexico withdrew from the deal to avoid “any doubts about the legitimacy and transparency” of the bidding process. The Chinese-led group had provided the only bid for the project. Now, citing “doubts and concerns in public opinion,” Mexico’s Transport Ministry announced that it would restart the bidding process.

As my colleague Clint explained on Monday, the China Railway Corp bid was attractive for a variety of reasons – low cost, quick construction time, and the offer to finance the vast majority of the project through the Export-Import Bank of China. Accordingly, the group may still win the contract after the new bidding process, but the decision to scrap the initial contract suggests that Chinese firms suffer from an image problem in Mexico.

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In other news, as U.S. President Barack Obama and Chinese President Xi Jinping gear up for their first major bilateral summit in over a year, here’s some background reading. First, U.S. Secretary of State John Kerry’s speech on U.S.-China relations provides a fairly optimistic take – you can read analysis from me and from Zach parsing the language, but the speech itself is worth a look.

Second, Chinese Ambassador to the U.S. Cui Tiankai gave an exclusive interview to Foreign Policy that provides a less sanguine look at the issues in U.S.-China relations. The amount of distrust between the two sides is on full display here as Cui talks about the Hong Kong protests, cyber espionage, and the superiority of China’s “election system.”

Elsewhere, China Media Project looks at China’s quest for a leading role in “global internet development and governance.” In particular, CMP analyzes comment from Lu Wei, the chief of the State Internet Information Office and (perhaps more importantly) the head of the new Internet Security and Informatization Leading Group. One of Lu’s most famous pronouncements was his declaration that “freedom means order” – that freedom of speech is inherently subject to concerns regarding social stability, as defined by the state. Under Lu, China is increasingly seeking to convince other countries to buy into its definition of internet freedom.

Finally, Gady Epstein of The Economist analyzes China’s ambitious new foreign policy agenda. Xi Jinping, Epstein writes, “seems to want to demand a bigger, more dominant and more respected role for China than his predecessors, Deng included, ever dared ask for.” Part of that means abandoning China’s long-standing foreign policy emphasis on the U.S. in favor of other engagements. “In truth, Mr. Xi does not have much respect left for Mr. Obama; the Chinese dismiss him as weak-willed in foreign policy. And so much of Mr. Xi’s ambition lies elsewhere,” Epstein argues. That includes ambitious new policies at both the regional (the AIIB and the new Silk Road) and the global level (the news BRICS development bank).

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