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INDUSTRY LINKS
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2012.More than €35mworth of contractswere signed during theTaoiseach-led trademission alone, which involved 90 com- panies. There were also a number of
significant announcements by a range of individual companies following the trade missions. For example, Irish engineering, architecture and project man- agement group PMGroup won new contracts with a capital value of over US$400m in China.
THE MARKET OPPORTUNITY As an economy, China is a “jug- gernaut of growth” and accord- ing to a recent HSBC report, the country is poised to become the world’s largest trading na- tion by 2016; accounting for 12.3pc of world trade by 2026. Alan Duffy, managing direc-
tor and Ireland head, corporate banking, HSBC, says there are significant opportunities there for Irish businesses, but it is by no means an easy market to enter because of cultural issues and red tape. “TheChinese currency [Ren-
minbi] is now openly traded. This makes it easier for Chi- nese suppliers to get paid and improves the logistics of doing business by removing a layer in the process. “There are still obstacles in
relation to import taxes but Irish State agencies are doing a phenomenal job in terms of helping Irish businesses be aware of the various issues in this respect.” There is now very strong in-
WHAT MAKES CHINA COMPELLING FOR IRELAND?
By 2030, two-thirds of theworld’smiddle class is forecast to be in China.
The entire population of Ireland is half that of many Chinese cities.
Two and a half times Ireland’s populationmove fromrural to urban China every year.
China's aerospace industry is growing by leaps and bounds, backed by a government plan to spend a quarter of a trillion dollars over the next five years to become the leading producer of commercial planes.
There are huge opportunities in food, food safety and farming, for example in dairy productswhich are starting fromlowbase.
terest in Ireland from China, which culminated in the recip- rocal visits, he continues. “China sees Ireland as being well positioned as a gateway to
Chinawill buy 800 thoroughbred horses per year. Source:MartinMurray, executive director,AsiaMatters
Europe. It is embedded in a wider market of 500 million people and has the added benefit of fiscal advantages, the English lan- guage and an optimumtime zone.” The chemicals, pharmaceuticals and consumer electronics
66 INNOVATION IRELAND REVIEW Issue 4 Spring/Summer 2012
sectors are all showing prom- ise and Duffy also highlights agri-food as a particular area of opportunity nowfor Ireland. “Food is the new scarce
commodity of the 21st century. Dietary changes in the China region are happening at a rapid pace and the country is moving more towards a pro- tein-based
diet.This is playing to the strengths Ireland has in the meat and dairy sectors. “The fact that Ireland pro-
duces 15pc of theworld’s infant formula and has no issues of contamination is also of large interest to China, following its well publicised problems in that area. “China is looking at opening
up its market in the area of agri-produce to feed its bur- geoning population. To date the country has been very dependent on New Zealand, which has had an unchal- lenged position over imports of quality agri-produce. The possibility of diversifying away from New Zealand opens up clear opportunities for Ire- land.” China’s population is aging
rapidly and because of its one- child policy, dependency levels are changing. At the same time wage levels are increas- ing. Labour-intensive low-end manufacturing is moving out of China given the fact that wage rates have increased at an annual rate of more than 20pc, far in excess of produc- tivity increases. “Over the past decade, 90
million people entered theChi- nese workforce, in the next decade this is expected to be five million [as a result of an anemic birth rate]. Those
workerswill have to bear the brunt of an aging population. This trend will increase demand for medical devices and diagnostic equipment. Ireland is already well positioned in this area, for example, through the medical devices cluster in Galway,” says Duffy.
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