Economic Implications of the International Silver Trade Between China and Mexico

Along with the rising tariff pressure from the US and high uncertainty around the globe, this paper investigates the effects of the bilateral silver trade between China and Mexico on economic indicators. Silver is an important industrial material that is essential in production of electronics and in brazing, as well as a well-known form of physical investment. This paper conducts an analysis on the historical trend of the China-Mexico silver trade, followed by a correlation study between the volume of silver trade and economic indicators such as economic growth, unemployment and inflation, along with the volume of silver mine production. The paper further analyses the correlation between silver import and performance of silver-consuming industries in China. Significant correlation is observed between the volume of silver ore traded and performance of Chinese jewellery industry, and between the trade volume and Mexican silver mine production, which indicates the importance of silver trade between the two economies. Therefore, China and Mexico should form a more stable trade relationship that benefits both countries, especially under the potential tariff pressure from the US, a large trade partner to the two countries. It is suggested that China can increase direct investment to Mexico and stabilise its accessibility to resources including silver, and thus create opportunity of economic growth for Mexico