PEORIA - Former Mexican President Vicente Fox said the United States has to bolster ties with Mexico - including recognizing the benefits of migrant labor - or get used to the idea of China setting the international agenda on its own terms.

"The threat is this so-called power shift from the West to the East," he told a press conference Thursday at an economic development event organized by the city of Peoria.

"Those nations on the East are getting ready and prepared to lead," Fox explained, saying there are forecasts showing the Chinese economy will be larger than that of the United States within a dozen years. "And that means a very important question to all of us: Under what principles are those leading nations (going to) be exercising their leadership?" Fox said.

His point: The U.S. would be better off dealing with Mexico and other Latin American countries than perhaps those with different worldviews.

"We have our values in the West that we share," Fox said. "So we all on this continent, especially North America, must get ready to meet that challenge."

That means bolstering the economies of the United States and Mexico, he said.

If the West wants to keep its edge, Fox said, there needs to be a recognition that Mexicans in the United States, legally or not, contribute to the economy of both countries. And that, he said, will require resolving the issue of who can come to this country and under what circumstances.

"It has to be based on humanism, on compassion, on love, on friendship, on neighborhood and on partnership that we have together," Fox said. "Otherwise, we will keep losing the jobs to the East."

Fox, who served as president from 2000 to 2006, insisted he is not in favor of "open borders."

"But I am in favor of the use of our talent, our wisdom, our intelligence," Fox said. And that requires finally filling the vacuum of what kind of laws on immigration are necessary.

In his speech, Fox did not address Arizona's approval of SB 1070 two years ago in an effort to give state and local police more power to detain and arrest suspected illegal immigrants. But in response to a question afterward, he said Arizona and other states have waded into the fray with their own laws out of frustration with the lack of action in Washington.

"At the very end, migration is a national issue," Fox said. With immigration reform stalled in Congress, "state governments and state legislatures have been forced to get involved."

Fox said that what's needed now is for lawmakers in Washington to come up with at least a framework for reform.

"We need to know what the playground is and what the rules of the game are," he said, calling on leaders to "put aside xenophobia, put aside all of our complaints that we might have, and sit down and discuss the differences."

Fox said it also needs to be recognized that this is not just a one-way relationship, saying Mexico buys $250 billion of U.S. products every year, meaning "millions of jobs" to this country's economy.

Discussing the increasing violence in Mexico, the former president clearly put much of the blame on this side of the border, with the heavy demand for drugs that financially fuels the Mexican cartels that move cocaine from South America through his country.

"It is a $50 billion market a year which is raised in this nation and is brought back to Mexico to bribe policemen and public officials," he said, as well as to hire children. "And they use that money to buy the weapons produced here in this nation."

Fox described Mexico's direct role in feeding the U.S. drug habit as minimal.

He acknowledged marijuana grown in Mexico, but deflected any real blame.

"I'm sure the state of California produces more marijuana, higher quality, than the one produced in Mexico," he said.

In talking with reporters later, Fox dismissed a question on whether Mexico should be doing more on its side of the border to keep out guns.

"We're trying to control drugs and ammunition," he said, adding that his country has "much better control" of that problem than the United States does in keeping out drugs. "The obligation to control that is yours," Fox said.