President Tsai Ing-wen meeting New Mexico Governor Michelle Lujan Grisham (Image: Office of the President of Republic of China News Releases)

New Mexico Governor Michelle Lujan Grisham Visits Taiwan on Trade Mission

Taiwan Asia

New Mexico Governor Michelle Lujan Grisham sought stronger ties with Taiwan on a recent trade mission, where a partnership was finalized with Hota Industrial Manufacturing.

In September 2023, New Mexico Governor Michelle Lujan Grisham led a trade mission to the Republic of China (Taiwan) seeking to further strengthen economic ties. The mission entailed participation in the US Business Day forum and meetings with Taiwan President Tsai Ing-wen, Minister of Economic Affairs Wang Mei-hua, and manufacturing companies interested in investing in New Mexico.

One of the most notable meetings during the trade mission was between Governor Lujan Grisham and Hota Industrial Manufacturing — an automotive gear manufacturer with clients like Tesla. They announced the finalization of an agreement for the business to expand into New Mexico, building their first plant in the United States. As part of the deal, $99 million will be invested by Hota to start construction at the Westpark Industrial Park in Santa Teresa. The project is estimated to create 350 jobs and generate an economic impact of $4.3 billion over the next decade.

Desert Blooms Grow with Taiwanese Investments

This deal is a significant milestone for New Mexico and Taiwan, who have steadily increased economic interaction over the past few years. One of the first ventures from a Taiwanese company came from Admiral Cable, which invested $50 million in a manufacturing plant in the Santa Teresa industrial complex. Not long after, Xxentria and Cymmetrik – two other Taiwanese firms focused on the manufacturing of metal composite materials and label printing respectively – announced millions of dollars of investment to create facilities for their operations in the same Borderplex.

Such increased interest from Taiwanese companies follows elevated engagement between business leaders and New Mexico government officials. In 2019, the New Mexico Economic Development Department opened a foreign trade office in Taipei. Later in 2021, a Memorandum of Understanding (MoU) was signed, laying the foundation for visits by Taiwanese officials, help with incentives, and technical assistance related to doing business in New Mexico. These exchanges clearly stirred Hota’s interest in New Mexico, as one of the trips by the Taiwanese delegations included executives involved in the electric vehicle industry.

Likewise, the State Legislature of New Mexico established a “Taiwan Friendship Caucus” which was primarily responsible for enacting SM 16 – a Senate Memorial emphasizing the ties between Taiwan and New Mexico and the need to increase economic, cultural, and educational interaction.

Due to these people-to-people interactions and investments, Taiwan recently became New Mexico’s seventh-largest source of imports and sixth-largest export market. More specifically, New Mexico exports $45 million in goods and services to Taiwan and has received $193 million in greenfield investment. New Mexico is also currently experiencing an exceptionally strong labor market including 234 jobs in the state supported by exports to Taiwan. This economic interaction between Taiwan and New Mexico is poised to grow due to investments from Taiwanese companies and federal legislation reducing costly barriers for interaction.

Why Did Taiwanese Firms Choose New Mexico? The Border and Federal Incentives

The surge in interest from Taiwanese businesses and other foreign investors follows federal legislation. The Inflation Reduction Act (IRA) created billions of dollars in incentives facilitating an estimated 210 clean energy projects nationwide, with three in New Mexico estimated to create 2,105 jobs. A project announced in August involves Singaporean-based Maxeon Solar Technologies investing $1 billion in Albuquerque to construct a solar manufacturing facility. Most strikingly, Maxeon CEO Bill Mulligan cited the law as catalyzinga new chapter in America’s energy transition”.

Secondly, the Infrastructure Investment and Jobs Act (IIJA) has stipulated that New Mexico will receive approximately $2.8 billion in federal funding for highways, bridges, and other major projects over the next five years. Last year, Governor Lujan Grisham announced that over $64 million would be used for expanded facilities and roads at the Borderplex. It is also no coincidence that $30 million more in state funding for infrastructure was announced before she went to Taiwan, along with a request for more federal money. This expansion of funding for infrastructure has no doubt made the state more appealing to foreign investors.

Thirdly, New Mexico is well positioned to accommodate companies looking to diversify their supply chains and nearshore their operations. Santa Teresa has the farthest east inland port of entry with four industrial parks that host a slew of foreign companies with extensive connections to Mexico – the US’ new largest trading partner. Foxconn – another Taiwanese firm known for making electronics – recently announced that it would invest $500 million into its manufacturing capabilities within Chihuahua State, Mexico. For its computer and tablet production in Mexico, Foxconn predominantly sources components from New Mexico, emphasizing the state's crucial role in cross border trade. As foreign investment continues to flow into the border region on both sides, New Mexico will likely benefit and grow its significance in global supply chains.

Hota Chairman David Shen acknowledged many of these aforementioned reasons for the investment, stating that the Santa Teresa site offered low labor costs in comparison to neighboring states and a unique preexisting transportation infrastructure. Furthermore, state assistance was integral in attracting Hota to New Mexico. The company was awarded $3 million through the Local Economic Development Act Job-Creation Fund and the company stands to qualify for other incentives including the High Wage Jobs Tax Credit, the Manufacturers Investment Tax Credit, and job training assistance through the Job Training Incentive Program.

New Mexico and Taiwan's Potential for a Broader Bond

Future economic cooperation between New Mexico and Taiwan is bound to happen, but there are other opportunities for further collaboration. For example, a MoU focused on cultural exchange was signed between the Taiwanese Ministry of Education and the New Mexico Higher Education Department in 2018. However, this was before the COVID-19 pandemic and has not resulted in many noticeable joint initiatives or agreements in recent years. The University of New Mexico could establish a Taiwanese Studies Center, similar to the one at The University of Texas at Austin. Likewise, more sister-city partnerships could be created, as the only one with Taiwan is Albuquerque’s pairing with Hualien. SM 16 mentioned how legislators are encouraged to lead delegations to Taiwan to advance cultural, tourism, and educational opportunities, so there is recent indication from New Mexico of more possibility in this domain. Increased people-to-people exchange, and domestic study of the Republic of China could have other downstream positive effects, including more economic investment from Taiwanese businesses.

Certainly, ties between New Mexico and Taiwan will continue to grow on cultural, economic, and educational levels. Governor Lujan Grisham’s visit and her securing of the deal with Hota ensures the state’s continued importance to the ROC and vice versa.

Bettyjane Hoover is a Young Professional at the East-West Center in Washington. She is a graduate student at American University’s School of International Service, studying International Affairs with a focus on the Indo-Pacific region.

Matthew Willis is a Young Professional at the East-West Center in Washington. He is an undergraduate student at the University of Texas at Austin, majoring in International Relations, Economics, Government, and East Asian Studies.