For years China Government has provided lots of incentives and tax exemptions that where appealing to western companies. However, the gap with other low-cost countries has being reduced since such incentive programs have being cut, and logistic costs have increased dramatically. In addition, China has the comparative advantage of producing the mix of very small, big volumes, standardized items.

On the other hand, Mexico is an excellent place to establish manufacturing operations for projects where the following features are evident:

• High engineering content.
• Intellectual property considerations.
• Proximity to US production demands.
• Similarities on business culture.
• Quality requirements.
• Flexibility capabilities.
• Big and bulky products.
• Big array of product lines on same location.
• High levels of interaction with US regulatory agencies.

• Mexico has easy and fast communications between North America, South America, Europe and Asia, as well as more than 12 free trade agreements with 49 countries among these regions.
• Highly skilled and competitive labor costs.
• Low operational costs.
• Advanced infrastructure.
• Headquartered in Mexicali, Baja California, Mexico IVEMSA provides outsourcing management services in northern Mexico.

• Baja California is strategically located in the northwest part of Mexico, along the border of California, the sixth largest economy in the world.
• Its main industries are: Metal mechanics, Aerospace, Automotive, Electronics, Medical Devices, Plastics, Building Materials, IT, Tourism, Agro business, among others.
• Its embryonic industries are: Semiconductor, Biotechnology and Alternative Energies.
• Baja California has a young thriving population.
• Highest levels of education in Mexico.
• Competitive labor cost.
• Low level of union presence.
• Well developed industrial park system.
• Great access to California and west coast markets.
• Abundant utility infrastructure (Water, Natural Gas, Electricity).
• Pro-business Political Environment on both sides of the border.

• Monterrey, capital of the State of Nuevo Leon, is located in the northeastern part of Mexico.
• There is a pool of a highly skilled work force.
• Excellent educational institutions.
• Excellent transportation infrastructure.
• World-class supplier network.
• Entrepreneurial, pro-business culture.
• Leading business city in Latin America.

• Large automotive cluster.
• There is a pool of well educated, highly skilled labor force.
• Good support and service infrastructure .
• Good transportation network to Monterrey and the border with the USA.
• Milder weather than Monterrey since it is at 4,800 ft altitude.
• Medium size community with good quality of living.
• Good connectivity to USA trough highways and airport (connection to Houston hub).
• More community willingness to attract companies than bigger cities nearby .
• One of the best cities to live in Mexico.

• Chihuahua, Chih. is a city in the north part of Mexico. The State of Chihuahua shares border with El Paso, Texas.
• Chihuahua and El Paso comprise one of the largest binational metropolitan areas in the world with a combined population of 2.5 million people.
• There is a pool of very experienced labor force.
• Strongly developed infrastructure.

• The Mexican workweek is 48 hours over 6 working days.
• Workers are entitled to double pay for the first 9 hours of overtime and triple pay thereafter.
• Sunday work entitles workers to a 25% premium.
• There is a minimum wage state on the Mexican Labor Law, but it is just a reference. Nobody pays the minimal wage, what rules in terms of salary and benefit is the market.
• The Mexican Labor Law entail employers to provide the following fringe benefits to their employees on employee's base income:
• Social Security.
• Pension or Retirement Savings Fund.
• Housing Fund.
• Christmas bonus.
• Vacation bonus.
• Based on the location and the labor market other benefits must be considered in order to have a smooth operation, good labor environment and lower turnover.
• Holidays: under Mexican Labor Law, employees are entitled to 7 annual paid holidays, plus one for presidential inauguration day every 6th year.
• Vacation: After one year of employment, employees are also entitled to at least six days paid vacation, increased by two days for each of three subsequent years of employment and by two more days for each additional five years.

In the north part of Mexico many industrial parks have developed and are home to many foreign multinational firms operating with these. Industrial parks offer developed land, inventory buildings and services to support the operations of the Maquiladoras in Mexico.

Buildings within the industrial park can be built to suit and inventory. Industrial developers offer the necessary improvements to adapt the buildings to manufacturing. Spaces can range from 200,000 sqft to under 5,000 sqft for a startup.

Additional benefits for new comers in some industrial parks are: day care centers, commercial areas, control access, labor pool data bank, salary surveys, and others. Industrial developers additionally guaranty that there will be sufficient utility services for future growth. This is important due to the fact that 80% of established factories grow in the first two years of operations.