China has officially delayed the approval for BYD, a leading electric vehicle manufacturer, to establish a manufacturing plant in Mexico. This decision, reported on March 19, 2025, stems from concerns within the Chinese government regarding the potential leakage of advanced technology to the United States. According to sources cited by the Financial Times, Beijing is particularly apprehensive that the proximity of Mexico to the U.S. could facilitate unauthorized access to critical smart car technology developed by BYD, which poses a competitive threat to domestic and international interests.

The approval process for foreign manufacturing plants requires clearance from China's Ministry of Commerce, which has yet to grant BYD the necessary permissions. The delay is compounded by geopolitical tensions and a growing scrutiny of Chinese investments abroad. The Mexican government has shown a somewhat hostile stance toward Chinese companies, further complicating BYD's efforts to secure approval for its $600 million plant project. This facility is expected to create approximately 10,000 jobs and produce up to 150,000 vehicles annually in its initial phase.

In recent months, the U.S. has accused Mexico of acting as a "backdoor" for Chinese goods entering North America, raising alarms about trade practices and national security. In response to U.S. pressures, Mexico has implemented tariffs on certain Chinese imports and initiated anti-dumping investigations into steel and aluminum products from China. These developments have created a challenging environment for BYD as it seeks to expand its footprint in Mexico while navigating the complexities of international trade relations.

BYD's plans to build a plant in Mexico were initially announced in 2023, with ambitions to double sales in 2025 and open 30 new dealerships across the country. The company aims not only to solidify its presence in Mexico but also to expand production capabilities in other regions such as Brazil, Hungary, and Indonesia. However, the current delay in approval raises questions about the future of these expansion plans and highlights the intricate balance between economic ambitions and geopolitical realities that companies like BYD must navigate in today's global market.