Posted Monday, June 18, 2012, at 1:23 PM
My least-favorite acronym of all time was BRICs, which just stood for "Brazil, Russia, India, and China," which are the names of four countries that don't have anything in common except that they happened to be growing rapidly at roughly the time the acronym was coined.
Now it turns out that Mexico is growing faster than Brazil, so maybe we need RIMCs instead.
The real story, however, is that Brazil's economy is largely complementary with rapid growth in China. Brazil does agricultural commodity exports and also builds airplanes. Mexico, by contrast, is more of a direct competitor with China as a platform for low wage manufacuring bound for the United States. As China started blowing up, that displaced some U.S. manufacturing activity but it displaced even more Mexico-based manufacturing activity. But China has started to run into the limits of "turn peasants into factory workers and keep paying them like peasants" as a growth strategy. That means rising wages for Chinese workers, which is good for them, and also new opportunities for other countries to regain manufacturing competitiveness. Hence the good news for Mexico, whose economy looks to be in solid shape notwithstanding the continued drug violence.