Wasting Away in Mexico

By May 5, China and its SARS epidemic were front-page news around the world. China made page one in Mexico, too -- but for a different reason. "'Made in China' is gaining on 'Hecho en Mexico,"' trumpeted Reforma, a leading daily. The article warned that the torrent of cheap Chinese products into Mexico was increasing. The ultimate affront: Statuettes of the beloved Virgin of Guadalupe now carried the Made in China sticker.

SARS is having a huge economic impact on China, with consumers shunning stores and restaurants, analysts slashing growth projections, and investors wondering if exports from China's coastal factories will start to flag. Among those wondering: managers in Mexico's vast manufacturing sector, which churns out everything from towels to autos, both for the local market and the U.S. Mexican manufacturing has been under slow, steady assault from the Chinese competition, and some in Mexico hoped that SARS would give Mexico a reprieve.