Mexicali: A Chinese Legend on the U.S.-Mexican Border

Huang Chuen is in his fifties. Observing his polite reserved manner, his simple clothes rounded off with a pair of white tennis shoes, and his smiling eyes typical of a Chinese businessman, you would never imagine that he's a wealthy entrepreneur. But in the past few years, the god of fortune has taken good care of him. He owns two large supermarkets--one on each side of the border on the road crossing between Mexico and the U.S.--and every morning a flood of Mexican laborers pours into his two stores to buy breakfast on the way to work. At quitting time, the same workers return to his American store on the way back home picking up all sorts of daily necessities at prices cheaper on the U.S. side than on the Mexican side of the border. Together the two supermarkets bring in close to US$20 million a year.

Buying Some Land and Opening a Supermarket: Twenty years ago, Huang Chuen's business wasn't profitable. "At the time I was running a tiny retail business working 17 or 18 hours a day and only bringing in a little more than US$30 a day". In 1965, to escape communist persecution, 28-year-old Huang Chuen with a group from his Kwangtung village left Hong Kong for North America. Denied entrance into the U.S. they had no choice but to settle down at the Mexican-U.S. border in Mexicali (which earned the name "rice town"). One year later, Huang Chuen made it to San Francisco, where he worked while learning English. He saved up US$800 and returned to Mexicali, where he opened up a typical Chinese style retail store. Twenty years later, his faith in the Chinese business principles of hard work, frugality, and land paid off and today he has several holdings in California. Six months ago, he spent US$750,000 to purchase four acres in the commercial district of Mexicali's sister city Calexico, where he plans to build a supermarket to compete head-to-head with a branch of the American chain store K-mart.

Huang Chuen's story is not really a miracle. There are many Chinese tycoons who after earning a tidy sum in Mexicali later moved on to develop their riches in California. With surnames like Huang, Li, Chou, and Ho, they came in increasing numbers. It is interesting that they all hit upon the same way of developing their fortunes starting out with small stores and building up to the supermarkets and shopping centers they own today.

Good Property on the Mexican-American Border: The figures on the accomplishments of the Chinese coming from mainland China before the 1950's are quite revealing: over 60% of the property in the business district is owned by Chinese; the city's 70 authentic Chinese restaurants have made Mexicali one of Mexico's most popular dining spots; there is a row of more than 30 shoe stores featuring the latest styles from Taiwan, Hong Kong, and the mainland; and the largest shopping center in town is now owned by a Chinese.

The first generation of Chinese settlers have already made their mark in Mexicali and, in the past five years, a new hope for development has come as Taiwanese businessmen arrive to invest in businesses and factories.

Huang Chuen relied on this prime location on the U.S-Mexican border to build his supermarket business, and now Taiwanese businessmen are recognizing the area's potential profitability. Lawrence Chu, who four years ago laid out US$6 million to develop the Acmex International Inc.--the first industrial park opened by a Taiwanese--is an example of this new type of investor.

The Acmex is designed to hold 100 factories. The land is now fully prepared for development and three or four Taiwanese manufacturers have already started their operations. Having gone so far from home to make this investment, it is evident that they see more than just the benefit of inexpensive Mexican labor (which at an hourly wage of US$1.60 is less than one third the cost of Taiwan labor). Laxer environmental protection standards are also a benefit, but most importantly the U.S. market is only one fence away. Not only are shipping costs greatly reduced, but the quotas imposed on Taiwan can be wholly avoided. All you've got to do is reach out and grab success.

Many businessmen now recognize the prevalence of a new "500 hour trend." The period of popularity for a product is extremely short. Whoever is closest to the market and is first to react to consumer reactions will beat out the competition. Take for example Leif Lee, former General Manager of the Kuang Yiing Enterprise Co., a lounge chair and handbag company.

Strong Feelings of Home in a Foreign Land: Great minds think alike, so it is not surprising that the "twin factory enterprise" with head-quarters in the U.S. and a factory in Mexico is becoming increasingly popular at the border. According to statistics, there are currently over 1,880 manufacturers from around the world (primarily U.S. firms) running this type of operation.

Many manufacturing cities have arisen along the over 3,200-mile U.S.-Mexican border. Near the Pacific Ocean, San Diego's Mexican sister city Tiajuana is home to 530 foreign owned factories; just below Texas, Juarez has 320 such factories; and placing third is Mexicali with more than 150.

There are several reasons why Lawrence Chu chose the latter as the site for his industrial park.

Firstly, Mexicali, the capital of Mexico's Baja California Notre with a population of 900,000, has a strong labor force. Secondly, it is at the mouth of the Colorado River so it's rich in hydraulic resources. Also, just 30 miles from the city is the largest land generator in the Americas so electricity shortages are not a problem. Aside from these objective conditions, the sweetest attraction to the businessman is the population of over 10,000 Chinese already living here. It's a superior environment for Chinese to live and develop their interests in.

With 70 Chinese restaurants and supermarkets with aisles lined with Chinese foods, it's easy for Chinese to eat in the style they are accustomed to. The Chinese's rich enterprising power is the basis for successful cooperative development. The scope of their enterprises is quite broad ranging from shoes, clothing, groceries, and hardware to large scale shopping centers together constituting an entire sales network. Many of the products they sell come from Taiwan, Hong Kong, and mainland China. "By cooperating with them both parties benefit," says Lawrence Chu who has learned many things from the older overseas Chinese community.

First Came the Chinese Then Came Mexicali: The sizable original overseas community already has firm roots in Mexicali. And now that a new wave of accomplished Chinese businessmen is coming from Asia's "little dragons," the Chinese community in Mexicali has a new profile of prosperity, brightness, and happiness. You can't compare their situation to the conditions of the first generation.

Looking back, the Chinese were early pioneers in setting up the town. This miracle began more than 90 years ago. At that time Mexicali was a tropical wasteland with summer temperature hitting 125 degrees Fahrenheit making it hard for man or beast to breathe. Aside from the small Indian tribes living on either side of the small "new river," the area was totally deserted for miles around.

In June 1901, after the United States constructed the Colorado River Dam, the river's flow was redirected to pass through the Mexicali area on its way to the sea transforming the arid wasteland into a verdant region. By this time, the Mexican government had already opened up the northern desert to development, leasing out the land to foreign, especially American companies. At the time the two most famous firms--the Louis Corporation and the Colorado River Development Corporation--both set their sights on Mexicali uniting their development efforts. In 1903, the first batch of an unrecorded number of Chinese laborers arrived in Mexicali. They received a daily wage of US$0.50, half of which went to cover room and board. With their meager savings they began to develop the area.

Actually, as early as the 1880's, contract laborers from China's Southeast coast were all over the region earning the nickname "grunts". In 1882, after the United States passed the Chinese Exclusion Act, thousands of Chinese laborers poured into Mexico from California. They worked in the cotton fields, in the hemp fields, in the copper mines, and in coal refineries performing backbreaking menial labor. When they weren't coming down with miasma they were suffering from the cruelty of their employers and death and illness were all-pervasive.

"China Mounta" and "Little Canton": Taking Mexicali as an example, "according to records, for every ten hectares of virgin land opened up for development, one Chinese laborer gave his life." This according to Ou-yang Min a painter and lecturer at the Provincial Art Institute in Lower California who has recorded and published a book on the pioneering experience of the Chinese in Mexicali. At the time travel was very difficult. After the laborers arrived in Ensenada, they had to walk for more than twenty days across the mountains before arriving at Mexicali in the scorching desert. Strangers in a strange land, they were often led astray and abandoned by coolie masters. Countless stragglers died of starvation along the way. Because so many Chinese died, the area received the name "China Mountain."

After so many Chinese laborers came to open up the land, it wasn't long before Mexicali became a true Chinatown. In 1919, there were already more than 9,000 Chinese compared to the less than 700 native Mexicans living in the town. Representing such a large majority, the Chinese gradually shed their status as virtual slave laborers by engaging in a variety of small businesses and grabbing a foothold in the city's economy. At the time, Cantonese could be heard everywhere in Mexicali and checks written out in Chinese Characters were accepted as legal tender. Neat rows of social halls, temples and other Chinese organizations sprung up throughout the bustling city. Every evening in the tea houses and Chinese theaters you could hear the beating of Chinese drums and the rasping of Chinese fiddles. The streets were filled with vendors selling their red bean soup and almond paste snacks. It was truly a golden age for the Chinese living in this "little Canton."

A Wave of Anti-Chinese Sentiment in Northern Mexico: Sadly, the good times were not to last. In August 1919, the governor general of Lower California ordered Mexicali officials to require that all foreigners obtain the authorization of the territorial administration before entering the city and a head tax was levied on all new arrivals. This created all sorts of obstacles for Chinese wishing to come to Mexicali. The national government also passed various exclusionary measures pertaining to the distribution of land encouraging native Mexicans to "migrate to the borderlands." The tables were turned and the economic power relationship between the Chinese and the Mexicans was effectively reversed.

The Chinese in Mexicali depended on their status as "city founders" and despite the persecution, the times were still relatively peaceful. But at the same time, Chinese living in other parts of Northern Mexico were swept under a larger wave of repression.

At noon on May 15,1911, a riot broke out in the Northern industrial city of Torreon. Three hundred Chinese--about half the city's Chinese community--were killed; in 1915, there was a disturbance in another and the mad rioters looted the commercial district murdering over 200 Chinese. In July of the same year, Mexican revolutionary troops and their impoverished supporters pillaged 40 large-scale Chinese owned businesses in Cananea. According to statistics their losses amounted to US$5.3 million.

Why did the cautious conservative Chinese whose focus was only on earning money become the targets of Mexican hostility? The answer is obvious. Hu Chi-yu, an expert in the history of the Chinese in Mexico, points out that "the problem wasn't what the Chinese did to the Mexicans; it was what the Chinese created for themselves".

Were the Chinese Becoming a New Class?!: According to Hu Chi-yu's analysis, beginning at the end of the 19th century, the Chinese were second only to the Americans in economic power in many of the cities in northern Mexico. Before the Chinese entered Mexican society, there existed only two classes: the extremely wealthy white magnates with their plantations and mines who were a virtual Mexican aristocracy and, under their control, the laborers designated to a servile demeaning fate.

What disturbed the Mexican people was the presence of another group who had entered the Northern Territory as common laborers on the newly opening land but who through their mutual aid and commercial savvy were able to shed their status as slaves and emerge as a class of "small capitalists" in little more than ten years. Starting with restaurants, laundry shops, and grocery stores and moving on to shoe factories, and garment factories, the Chinese carved out a definite niche for themselves in the economy of northern Mexico.

The desire to rid themselves of these economic invaders was the setting for the Mexicans' anti-Chinese activities. Aside from the killings and the vandalism, these activities took a new form after 1916. Local governments set in place all sorts of laws such as those forbidding Chinese to travel or to sell fresh produce and meat; and there were many other prejudicial injunctions aimed to limit the further growth and prosperity of the Chinese community.

Naturally, this prejudicial legislation left the Chinese vulnerable to the law. Still they showed amazing resiliency in surviving this trying ordeal. Statistics show that over 6,000 Chinese poured into Mexico in the years 1919 through 1921 and Chinese economic power remained strong in cities and towns throughout northern Mexico up until the worldwide depression beginning in 1929 when Mexican unemployment rates soared, rioting became widespread, and Chinese exclusionary activities resumed more cruelly and thoroughly than ever before.

A series of anti-Chinese legislation was enacted including a "Law forbidding marriage between Chinese and Mexicans," "a sanitation law," and "the 80% labor law." The so-called "sanitation law" restricted Chinese commercial activities to the sale of certain important products and forbade them to engage in more than one type of business. It also required that all fresh produce and meat be inspected and certified before Chinese could sell it in public markets. The so-called "80% labor law" stipulated that at least 80% of the workers in a foreign-owned factory be Mexican citizens. This had an enormous impact on the Chinese who were accustomed to employing friends and family from their home town and villages.

With Good Times Gone, They Went Their Separate Ways: In the early 1930's, anti-Chinese activities reached their highest level. Many Chinese gathered up their families and left. Some headed for the U.S., Canada, and other countries in Central and South America. Others grew tired of living overseas and returned back to their home towns and villages in China. Only a few decided to weather the storm and stick it out in Mexico.

Over the course of a half century, the effects of anti-Chinese activities slowly receded, especially in the 1960's when the U.S.-Mexican border became a free trade zone. As foreign-owned factories have sprung up throughout the area, the atmosphere has become increasingly liberal, and the likelihood of a recurrence of racial prejudice has disappeared. Even though the Chinese now comprise less than 2% of the population of Mexicali, they have recovered their thriving economic status. It is easy to see that with more than 70 Chinese restaurants, over 50 grocery stores, more than 30 shoe stores, and five or six large shopping malls, the old generation of Chinese settlers continue to prosper.

In the past few years, as living standards have begun to rise, a majority of Chinese have decided to make strides across the border setting up businesses, making homes, and sending their children to American schools and companies. Within the 100 square mile border region there are many overseas Chinese who pass through Mexican customs in the morning on their way to work. In the evening their cars thread their way back through U.S. customs as they return to their homes in the States.

Building a Better Future Hand in Hand: This cross-border lifestyle is also being adopted by businessmen coming from Taiwan. Doing business in both the U.S. and Mexico throughout the day, both generations of Chinese settlers gather together at Chinese restaurants for the noon meal and some good conversation. In the evenings, they return to the share the same neighborhoods. They may have been raised in different circumstances and the focus of their businesses may diverge, and while the older Chinese families speak Cantonese and Spanish and the Taiwanese speak Mandarin and English, still together they have built up warm friendly relationships.

The first wave of Chinese settlers had to struggle for nearly a hundred years. The newly arriving businessmen have been in Mexicali for a much shorter time and they're still finding their own way. Nevertheless, as Lawrence Chu explains, "there's a lot we can learn from the older Chinese settlers." Perhaps through their combined efforts, all the Chinese in Mexicali will create a bright new tomorrow.

[Picture Caption]

The Peso Co. Supermarket, located on the road traversing the U.S. Mexican border, has brought prosperity to Huang Chuen.

The U.S.-Mexico highway is lined morning and night with cars waiting to pass through U.S. customs. Many Chinese have adopted a cross- border lifestyle.

The Chinese have long been Mexicali's shoe sellers as seen by this row of Chinese-run shoe stores in the city's downtown area. The shoes lining their shelves are mostly imports from Hong Kong, Taiwan, and mainland China.

(Left)Mexicali's newly constructed large-scale shopping center is also owned by a Chinese entrepreneur.

(Above) By the 1920's the accomplishments of Chinese businesses in Mexicali were already outstanding. This is an old picture of the Mercantil Chino Mexicana.

(Below) For every ten hectares of developed land, one Chinese laborer ga ve his life. The status that the Chinese enjoy here today was built on the blood, sweat, and tears of the original settlers.

The Chinese have erected a memorial tablet at the Chungshan Hall. The ta blet is the work of local artist Ou-yang Min. Below is an incense burner for the offering of prayers.

(Above) Chiu Cho-loin. (Right) The family business has already sustained five generations. Chiu family patriarch Chiu Ju-chao is a leader in the overseas Chinese community who has made great contributions to the education of his people.

(Below) Ample labor and low wages are two features of the U.S.-Mexican b order region which are most attractive to foreign manufacturers.

Lawrence Chu's Acmex International Inc. may one day provide a new home f or Taiwan manufacturers investing in this area.

The Peso Co. Supermarket, located on the road traversing the U.S. Mexican border, has brought prosperity to Huang Chuen.

Mexicali's newly constructed large-scale shopping center is also owned by a Chinese entrepreneur.

The Chinese have long been Mexicali's shoe sellers as seen by this row of Chinese-run shoe stores in the city's downtown area. The shoes lining their shelves are mostly imports from Hong Kong, Taiwan, and mainland China.

By the 1920's the accomplishments of Chinese businesses in Mexicali were already outstanding. This is an old picture of the Mercantil Chino Mexicana.

For every ten hectares of developed land, one Chinese laborer ga ve his life. The status that the Chinese enjoy here today was built on the blood, sweat, and tears of the original settlers.

The Chinese have erected a memorial tablet at the Chungshan Hall. The ta blet is the work of local artist Ou-yang Min. Below is an incense burner for the offering of prayers.

Chiu Cho-loin. （Right） The family business has already sustained five generations. Chiu family patriarch Chiu Ju-chao is a leader in the overseas Chinese community who has made great contributions to the education of his people.

Ample labor and low wages are two features of the U.S.-Mexican b order region which are most attractive to foreign manufacturers.

Lawrence Chu's Acmex International Inc. may one day provide a new home f or Taiwan manufacturers investing in this area.