Ireland beckoning Chinese investment to aid recovery

Updated: 2013-07-25 06:36

By Li Jiabao (China Daily)

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Tax rates, business environment, young workforce among nation's attractions

Ireland has turned to China for investment to support its struggling economic recovery as the ongoing financial crisis in the European Union continues to dog the country.

"It's hopeful that Chinese investment in Ireland will keep fast growth in the near future," Richard Bruton, the Irish Minister for Jobs, Enterprise and Innovation, told a news conference on Wednesday. "We can say with confidence that investors in Ireland get the best business environment and the best tax treatment in the world. For Chinese investors, Ireland represents a good, low-risk gateway in the EU."

"Obviously we have delivered greater focus on China and Asia over the last couple of years as we have to tackle the crisis," he said, adding that the country saw a good investment flow from China last year, which represented 6 percent of Ireland's overall investment value.

The country's main attractions for Chinese investors include a favorable tax and business environment and a very young workforce, which has been developed to support sectors such as financial services, medical device makers and life science companies, according to Bruton.

Irish unemployment levels are going in the right direction as the rate is now 13.5 percent, down from its peak of 15 percent in the last 12 months, he added.

The Investment and Development Agency of Ireland on Wednesday set up its Beijing office, after setting up branches in Shanghai and Shenzhen, to support Chinese financial institutions planning to do business in the country.

Total Chinese investment in Ireland was worth $150 million by the end of 2012, compared with $148 million by the end of 2011, according to the Economic and Commercial Counselor's Office of the Chinese Embassy in Ireland.

"It takes time to build a new relationship, particularly in investing in a different continent with different business cultures," Bruton said. "But Ireland has huge opportunities for Chinese companies, particularly in technology."

The two countries upgraded their bilateral relationship to a mutually beneficial strategic partnership in 2012. The strategic partnership now covers areas like trade, investment, tourism, agriculture, science and education.

Eamon Gilmore, Ireland's deputy prime minister and minister of foreign affairs and trade, will pay a visit to China from July 28 to Aug 3 after a trip by Greek Prime Minister Antonis Samaras in May to attract investment.

"The story is almost the same for these countries heavily hit by the crisis: they simply believe that Chinese companies have huge amounts of capital and need to invest overseas. But it's necessary for them to figure out what they can really offer Chinese companies and boost their industrial development back home," said Cui Hongjian, director of European Studies at the China Institute of International Studies.

He added that Chinese spending in the EU did increase after the debt crisis hit the bloc, but is centered in Germany, which has seen the best performance during the crisis and has a high complementarity with Chinese industries.

Compared with the flat investment growth, Sino-Irish trade has regained momentum since the start of the 2008 financial crisis. China is Ireland's biggest trade partner in Asia and bilateral trade reached $5.89 billion last year, compared with $5.20 billion in 2009, according to China's General Administration of Customs.

But recent data from Eurostat - the bloc's statistics office - showed that two-way trade declined 8.5 percent year-on-year in the January-March period.

"The decline is related to the weak consumption in Ireland. In relation to China, I think the picture is very positive at the present time and for the future," said Declan Kelleher, Ireland's ambassador to China. "Irish trade with China is widening and deepening. We have new patterns of trade developing in the area of food and agri-business with very substantial increase in trade."

Ireland beckoning Chinese investment to aid recovery

(China Daily 07/25/2013 page14)