Huge Chinese expo center planned for Cancun riles Mexican businesses, environmentalists

 

McClatchy Newspapers

It’s a big dream: A massive complex near the resort of Cancun that would be the largest trading center for Chinese products in the Western Hemisphere.

The proposed complex would house 3,040 showrooms, divided among 14 industrial sectors and targeting wholesalers from across Latin America. Projections estimate that it would draw 1 million people a year to a resort that already is the most popular beach destination in the Western Hemisphere.

But just one month ahead of its expected groundbreaking, the $180 million Dragon Mart Cancun is drawing loud objections from an odd alliance of Mexican environmentalists, who worry about the predicted surge in visitors, and business interests, who fear competition from inexpensive Chinese imports.

“We categorically and overwhelmingly oppose the initiative to install a Dragon Mart on our national territory,” the Confederation of Industrial Chambers of Mexico, the nation’s largest industrial group, said in a statement last month.

The group said it was worried about China’s past practices of “under invoicing, fake receipts, price subsidies, weak tax collection, almost null labor requirements and zero commitment to the environment.”

“The project may represent a beachhead for the massive arrival of Chinese products in conditions of unfair trade that may affect national industry and production chains,” the group added.

A business-supported think tank, the Center for Economic Studies of the Private Sector, said this week that it agreed with those concerns. It noted in a statement that China has chalked up 643 anti-dumping complaints through mid-2012, more than any other member of the World Trade Organization. Mexico has lodged 19 of those complaints.

It called on authorities to conduct “a serious and urgent investigation” of the business plan of Dragon Mart Cancun to ensure that competition will be fair.

Already, the overseers of Dragon Mart Cancun have made concessions. For one, Juan Carlos Lopez, the director general of Dragon Mart Cancun, said the expo had decided to ban exhibits by Chinese sellers of shoes and clothing.

“These two industries are very sensitive in Mexico,” he said.

Another concession, Lopez said, is that the expo center will no longer be only for Chinese vendors but also for vendors from around the world.

On the same parcel as Dragon Mart Cancun will be warehousing and 722 villas where vendors may live.

“It’s not just for Chinese people. Anybody who leases a booth can lease a home,” Lopez said.

He said he expected 400 to 600 agents of mainland Chinese companies to work at Dragon Mart Cancun, part of the 8,550 direct and indirect jobs he said the project will generate.

If the project goes ahead as planned, it would follow the rough model of Dragon Mart Dubai, the first effort by Chinese business and industry to set up a massive showroom center abroad to promote Chinese products. Dragon Mart Dubai, which measures more than 1,300 yards from end to end, opened in 2004.

Dragon Mart Cancun will contain sectors that offer home appliances, communication equipment, lighting, household furnishings, jewelry, building materials, furniture, toys, machinery, medical equipment, auto parts, foodstuffs and general merchandise.

“Latin Americans, instead of going to China or Asia, or going to different international fairs or expositions, will go to Cancun,” Lopez said.

Lopez said the Chinese government has no stake in Dragon Mart Cancun. Rather, a Chinese entrepreneur, Hao Feng, who is also behind a third proposed Dragon Mart in Bahrain, holds a 10 percent stake through a Netherlands-based private company, Chinamex, he said. The other 90 percent of Dragon Mart Cancun is in the hands of Mexican investors from Merida and Monterrey, he said.

Chinamex considered a series of other cities for the Dragon Mart, including Los Angeles, Miami, Panama City and Sao Paulo, as well as other locations in Mexico, including Tijuana, according to promotional literature.

Cancun won because its airport has more international flights than any other in Latin America, Lopez said, and its world-class hotels, restaurants and tourist attractions also will draw buyers.

“It’s a nice place to go,” he said.

Moreover, the exposition center will broaden the regional focus from tourism: “This is an opportunity to diversify the economy,” he said.

Most of the merchandise ordered through Dragon Mart Cancun will never come through the Yucatan Peninsula. Instead, it will be shipped directly to the port nearest the buyer, Lopez said. Volumes may be huge. Lopez said Dragon Mart Dubai last year traded the equivalent of 52,000 20-foot containers.

Environmental groups also have taken aim at Dragon Mart Cancun, which would sit on a 1,367 acre site about four miles from Cancun’s airport.

“There is environmental concern because it is nearly along the coast and only 3,400 meters (2.1 miles) from a protected area, the reefs of Puerto Morelos,” said Alejandra Serrano, a representative of the Mexican Center for Environmental Law.

Serrano said Dragon Mart Cancun has not been transparent about its long-term plans nor has it complied with zoning laws on protecting green areas.

Lopez responded that the project will have its own water treatment plant and will make extensive use of solar energy.

“We will not chop any vegetation, any trees. Zero,” Lopez said. “There are very few projects in all of Mexico that are so green.”

Lopez said the project already has received the green light from the surrounding state of Quintana Roo and only awaits a building permit from the Benito Juarez municipality, which he expects next month.

The project should be completed by May 2014.

Email: tjohnson@mcclatchydc.com; Twitter: @timjohnson4

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