Deeper Ireland-China relations bring profit to both

Brendan Howlin says with the establishment of a consulate general in Hong Kong, Ireland is set to expand its economic ties to China, with financial services and technology leading the way

PUBLISHED : Monday, 17 March, 2014, 3:41am
UPDATED : Monday, 17 March, 2014, 2:23pm

It is customary for Ireland's government ministers to travel overseas at the time of Saint Patrick's Day, which is celebrated today. Our National Day is an occasion to renew global friendships and to harness opportunities for Ireland and its partners. This year, I have the honour to visit Hong Kong as well as Beijing and Shanghai.

Ireland is emerging strongly from a difficult recession - the legacy of a global financial crisis and the bursting of a banking and property bubble. Having overcome significant challenges, we recently passed a number of milestones in our continuing recovery.

In December, Ireland became the first country of the euro zone to exit an EU-International Monetary Fund support programme by fully implementing its demands. In January, Moody's became the last of the main rating agencies to return Ireland to investment grade. Confidence is rebounding. Our bond yields are touching historic lows.

Having implemented far-reaching reforms, Ireland's public finances are now firmly under control. We will bring our public deficit below 5 per cent of gross domestic product this year and below 3 per cent next year. Most encouragingly, while we were losing 1,600 jobs a week during the crisis, the market is now creating 1,200 net new jobs each week.

Analysts believe that Ireland has the strongest long-term growth prospects in Europe. This turnaround required collective national sacrifice. Hard political decisions were taken and implemented with support from the people. There is, of course, a road yet to travel. We will continue to set ambitious targets for public finances, for innovation and job creation.

To prosper, Ireland - a small country - must be outward-looking and competitive. Over recent years, our competitiveness relative to our trading partners has markedly improved. Labour, commercial property and other business costs have decreased significantly.

Trade is a major driver of our recovery. Our exports are now significantly higher than their pre-crisis peak in 2007. Our external balance on current account is in healthy surplus, at 4 per cent of GDP.

We set ourselves the goal of being the best small country in the world in which to do business. In December, Forbes magazine's annual survey named Ireland the best country, of any size, for business.

Ireland is the technology and financial services gateway to the European Union, the sole English-language country in the euro zone area.

Overseas companies have chosen Ireland as their strategic base in Europe, including eight of the top 10 global information and communication technology corporations, nine of the world's top 10 pharmaceutical corporations and all 10 of the largest companies "born on the internet".

Ireland is, therefore, an ideal partner for a China that's going global and for Hong Kong.

One area in which Ireland is particularly complementary is financial services. Ireland has a thriving international financial services sector. More than 500 global financial services firms have been established there. We have built strong expertise in funds and fund servicing, custody, insurance and reinsurance, aircraft financing and leasing.

About half of the world's fleet of leased aircraft are managed from Ireland. More than 40 per cent of all global alternative investment funds are serviced from Ireland.

As the renminbi internationalises, Ireland presents an attractive choice for the Chinese funds industry. Ireland is also an ideal hub from which Chinese financial institutions can base their European operations. A number of innovative Irish financial services firms are already doing business successfully in China and Hong Kong.

Ireland is a centre of excellence for software and high technology. There are two complementary strands: first, a strong cohort of international market leaders that have based their European operations in Ireland; and, secondly, a large number of Irish information and communication technology companies that have achieved success globally.

As China prioritises the development and global reach of its own hi-tech sector, there are excellent opportunities for partnering with Irish companies.

A significant recent development has been the launch of a China Ireland Technology Growth Capital Fund. Supported by Ireland's National Pensions Reserve Fund and China Investment Corporation (CIC), the fund will invest in growing Irish technology companies with strategic ambitions to enter the China market and in growing Chinese technology companies wishing to use Ireland as a base for their European operations.

The agri-food sector too has been a strong pole of synergy and success. Food is Ireland's largest indigenous industry.

The demand in China for high-quality and safe food has trebled Ireland's food and drink exports to the country in just three years. China is Ireland's second largest market for dairy products. Ireland also has a cluster of successful agri-technology companies that are eager to support the development of the sector in China.

The education partnership between Ireland and China is rich and varied. There are more than 160 agreements between Irish and Chinese education institutions, including joint programmes, collaborative research agreements, student and staff exchanges. We will develop this further, with benefits for institutions on both sides - and, crucially, for students seeking a high-quality education.

The connections between Ireland and Hong Kong are deep and long-standing. Determined to strengthen this relationship further, the Irish government has decided to establish a full consulate general in Hong Kong. The consulate general will develop new and mutually beneficial trade and investment linkages between Ireland and Hong Kong. It will work closely with Hong Kong's dynamic Irish community, including the Irish Chamber of Commerce here.

Now is undoubtedly a very positive moment for Ireland's relationship with China and with Hong Kong. Warm political relations infuse our trade, investment, education and cultural links. My visit this St Patrick's Day aims to reinforce these connections and to open new opportunities for mutually beneficial co-operation.

Brendan Howlin is Ireland's minister for public expenditure and reform