Ireland the 'Hong Kong of Europe'

Updated: 2012-02-21 08:08

By Zhang Haizhou and Cecily Liu (China Daily)

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LONDON - Irish business leaders are eyeing China as a huge export market, while Dublin sees itself as an ideal destination for Chinese investors seeking opportunities in Europe.

Ireland's low corporate tax rate and its language advantage as the only English-speaking country in the eurozone are seen as major attractions for more potential Chinese enterprises.

"China's investments in Ireland had a slow start, but significantly grew in the last two to three years," said Brian Conroy, director of Asia-Pacific at Industrial Development Agency, Ireland's investment promotion agency.

Many Chinese businesses, including Bank of China, Industrial and Commercial Bank of China, China Development Bank, and leading telecom equipment companies Huawei and ZTE, have expanded to Ireland in the past few years, according to Conroy.

Conroy has noticed that Chinese investors now "tend to focus on R&D, customer support, branding and services, and hence are employing more people", compared with five or six years ago, when "most European offices set up by Chinese businesses were sales offices".

"Ireland is home to high-tech companies, so we are the second-largest exporter of software technology, which gives Chinese companies opportunities to partner with Irish companies," said Conroy, who expects more future investment in financial services, life sciences, information and communication technology, Internet, wind energy and clean technology.

Ireland remains a hub for international brands. Google, Facebook and Intel all run major European operations in Ireland, lured by its low corporate tax of 12.5 percent.

Conroy's message came as Vice-President Xi Jinping arrived in Ireland on Saturday with a business delegation of Chinese companies. The Industrial Development Agency will then host a major forum to advertise business opportunities in Ireland.

Kevin Lynch, chairman of Ireland China Association, which is responsible for promoting trade between the two countries, said the country is also attractive for Chinese investors because it's the "Hong Kong of Europe".

"It is the only English-speaking country in the eurozone. So for Chinese investors wanting access to Europe, access to countries trading in the eurozone, Ireland is a natural fit," said Lynch.

According to him, both countries have very similar processes of development. While Ireland managed to transform a longtime agrarian society into a high-tech one in only 15 to 20 years, China is going through a similar transformation.

Noting dairy products, especially milk and baby formula, are becoming more popular in China, Lynch sees tourism and education as future areas to attract more Chinese.

Ireland's trade deficit with China increased in the first 10 months of 2011 compared with the same period in 2010, while exports and imports both fell, according to Eurostat figures published this week.

Between January and October 2011, the total value of Irish exports to China was 1.2 billion euros ($1.6 billion), while imports from China amounted to 1.5 billion euros. This compares with exports of 1.3 billion euros and imports of 1.54 billion euros in the first 10 months of the previous year.

The bulk of trade was accounted for by exports from Ireland of services, chemicals, pharmaceuticals, office machinery and software, and imports from China of textiles and office machinery.

"Obviously everybody recognizes that China is the second-largest economy in the world now. It's a silly thing to do not to engage with China," said Alan Buckley, China director of Enterprise Ireland, a government economic agency focused on helping Irish-owned businesses deliver new export sales.

Buckley said more than 130 Irish companies have offices in China, while there were less than 40 just five or six years ago.

At least 250 Irish companies are in some way engaging with China, he added.

Buckley also highlighted education services as "one of the biggest sectors" for Irish export.

He said there are now around 5,000 Chinese students in higher education in Ireland, while "many, many more" are studying in English language courses.

"Outside the EU, China has now the largest number of international students in Ireland," Buckley added, noting 126 joint programs now exist between Chinese and Irish universities.

China Daily