A handful of Korean merchants have set up shop in one of Mexico's oldest barrios, Tepito, famous for resisting outsiders since the arrival of the Spaniards. The fears of the Tepitenos say more about the fortunes of this historic marketplace in the era of free trade than they say about the newest Tepitenos. PNS correspondent Sam Quinones reports for Mexico Business and other publications from Mexico City.

MEXICO CITY -- In Tepito, one of Mexico City's toughest barrios, fears focus not on the dramatic rise in crime or the country's bruising economic crisis but on what residents call "the invasion of the Koreans."

"They speak pigeon Spanish. Getting along with them is difficult, especially with the women. We've heard that they fight a lot with their women in the street but the women always win," says Alfonso Hernandez, director of the Center for Tepiteno Studies and a leader in one of the neighborhood's largest vendor associations.

Pointing to the cover of a community newspaper showing a tarantula -- symbolizing drugs -- attacking Tepito, Hernandez adds, "We don't think it's by chance that drug trafficking arrived at about the same time as these people."

Like their compatriots who moved in earlier decades to Los Angeles and New York, Koreans came here in the early 1990s looking to gain a foothold in an embattled urban core. Mexico was then the emerging market darling of Wall Street, and Tepito -- whose commercial hub predated the Spaniards -- was famous for its black market activity.

Today some 50 Korean merchants rent shops here, mainly selling women's clothing made in Korea. The numbers would be far higher were it not for Mexico's restrictive immigration laws (there are only 1,000 Koreans in Mexico as a whole -- far lower than their numbers elsewhere in Latin America). Dwarfed by Tepito's 5,000 to 8,000 vendors, the Korean presence would seem too minuscule to matter.

But Tepito is a ghetto with a history of resisting the outside world. Treeless and crime-ridden, it is a 37-square-block Mexican version of Hell's Kitchen whose residents refer to themselves first as Tepitenos and later as Mexicanos. The motto "Proud to be Mexican, but it's a gift of God to be from Tepito" puts things in what people here would call the proper perspective.

The neighborhood has always been among the poorest in Mexico City, but never the most prostrate. Tepitenos are known as Mexico's supreme micro-capitalists, with an instinct for survival best typified by their ability to make a living from what other barrios throw away. In the 1950s and '60s Tepito also produced a string of boxing champions -- small, scrappy men who embodied the barrio spirit and fought as if their lives depended on it. Along the way, Tepitenos beat back several urban renewal efforts that rolled over less resilient barrios.

In this context, residents view Koreans as just another attempt by the outside world to redo Tepito. "Tepito has always defended itself from people who aren't from here but want to come in and change it," says Leopoldo Reyes, a vendor of used tools. "They (the Koreans) are leaving now. They're not surviving the (economic) crisis, or the thieves."

"But the Tepiteno does survive," adds Enrique Gallardo, another vendor leader. "They (Koreans) want stratospheric sales. They're not finding them. The Tepiteno survives, bears up."

For all the tough talk, Tepito long ago surrendered control of the neighborhood to outsiders. The vast majority of vendors here live in other parts of Mexico City. And well before the Koreans set up shop, the onset of free trade was eroding Tepito's primary source of revenue -- smuggled merchandise, or fayuca. Tepito's streets once hummed with vendors selling new contraband. But today Mexicans can buy their imported stereos, perfume and tennis shoes in real stores. The fayuca has dwindled.

Some Tepitenos have responded by becoming cocaine dealers; Tepito is now one of the only places in Mexico City where cocaine is sold as openly as it is in many U.S. neighborhoods. Other merchants found relief in the coming of the Koreans, who signed year long leases at above market rents.

But to most, Koreans are the most visible scapegoats for Tepito's declining fortunes. "This is a barrio that's been around for more than five centuries, and now it's falling apart," says Jose Alberto Lopez, a journalist for El Dia. "If you say this to a Tepiteno he'll tell you to go to hell. But inside he's feeling defeated."

Some Koreans themselves are having second thoughts about Mexico -- and Tepito. "No country is worse off than this one economically," says a merchant who gave his name as Daniel. Now 35, he's thinking of moving on to Peru or El Salvador.

But others have found ways to weave themselves more finely into the Mexican economy. Last February, Seung Hoon Han, president of the Korean Merchants Association, opened a shop employing 20 Mexican workers to use Korean fabric to make clothes for the Mexican market. "I'm thinking also of sending some of it to the United States, since there are no tariffs if it comes from Mexico."

Beyond that, Han points to a large map on which is charted every fish known to exist, in salt water and fresh, in and around Mexico. Han says he'd like to export fish from Mexico to Korea some day, offering, ironically, what might be called a Tepiteno's view of the possibilities.