New US-Mexico agreement to monitor foreign investments comes as more Chinese money flows into Mexico

MEXICO CITY (AP) — As more Chinese money flows into Mexico, the United States and Mexico on Thursday agreed to monitor foreign investments and regularly share information about the screening.

The U.S and Mexico “benefit when they work together to guard against foreign investments that pose national security risks,” U.S. Treasury Secretary Janet Yellen said in a statement.

The U.S. wants to prevent Chinese purchases of sensitive American technology that could be accessed through other U.S. trading partners. The U.S.-Mexico agreement may help achieve that goal.

“This engagement is further evidence of the close partnership between our two countries, not only on matters of trade but also on critical issues of national security,” Yellen said.

The U.S. is Mexico’s top trading partner, with bilateral trade reaching more than $850 billion in 2022. But China has increased its investment into Mexican companies in the past few years and is the fastest-growing source of foreign investment in Mexico.

The U.S. Treasury Department said the new agreement addresses “national security risks that can arise from certain foreign investment, particularly in certain technologies, critical infrastructure, and sensitive data.”

The Biden administration acted to ban the exports of advanced computer chips to China last year. In August, President Joe Biden signed an executive order to regulate high-tech U.S.-based investments going toward China. Washington said that move was targeted but also reflected an intensifying competition between the world’s two biggest economic powers.

Biden and China’s president, Xi Jinping, met in November and pledged to stabilize their relationship as they showcased modest agreements to combat illegal fentanyl and reestablish military communications. Deep differences on economic competition and global security threats remain.

Earlier during her trip to Mexico, Yellen promoted her agency’s new strike force to help combat illicit fentanyl trafficking as the U.S. and China step up efforts to stop the movement of the powerful opioid and drug-making materials into the United States.

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Hussein reported from Washington.