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The Visit of Chinese Vice President Xi Jinping to Ireland, 18 – 20 February 2012: Key issues and where we go from here.

01 Mar 2012

Between 18 and 20 February 2012, Chinese Vice President Xi Jinping was in Ireland on an official state visit. It is expected that he will be appointed as President of the People’s Republic of China, General Secretary of the Chinese Communist Party and Chairman of the Central Military Commission, between October 2012 and March 2013. Hence, the occasion of his visit to Ireland is a particularly striking milestone in Sino-Irish relations.

Why Ireland?

Why is China focusing on its bilateral relationship with Ireland? Five factors come to mind: (i) The Shannon Development Zone, (ii) Ireland’s unique position in Europe, (iii) the forthcoming Irish Presidency of the European Union in 2013, (iv) the strength of the Irish agri-food sector and (v) Ireland’s response to the financial crisis.

·       First, the ‘Shannon Free Zone’ (the world’s first free trade zone), which was used as a model for the development of China’s own special economic zones, the ‘Shanghai Pudong New Area’ and ‘Tianjin Binhai New Area’. On 19 February 2012, Vice President Xi visited the Shannon Development Zone and referred to the long history between China and the Shannon region, which began in 1980 with a visit by former Chinese President Jiang Zemin, then Senior Vice Minister of State Imports and Exports Administration. Within the Shannon Free Zone, Chinese companies can import goods into the region, manufacture or reconfigure the goods, and then export them within the European Union without intervention of the customs authorities.

·       Second, Ireland currently enjoys a unique position in Europe that makes it a useful entry point into the European market. Ireland is the only English speaking country in the eurozone and enjoys tariff and border free trade across the European Union, with a market of 500 million consumers.

·       Third, the Irish Presidency of the European Union in 2013 will directly coincide with the first phase of Mr Xi’s Presidency, if the forthcoming transition in Chinese leadership proceeds as currently anticipated. This “represents an invaluable opportunity to demonstrate the contribution Ireland can and does make at the heart of decision making in Europe”, according to An Taoiseach, Enda Kenny, TD[1].

·       Fourth, Ireland’s agri-food sector has the potential to resolve problems of food security in China. John F Whelan, CEO of the Irish Exporters Association, remarked that the agri-food sector in Ireland has secured growth in excess of 10% for the last two years and is increasingly important in terms of trade with China[2]

·       Fifth, commentators have mentioned that China has a vested interest in ensuring the resolution of the European financial crisis due to its dependence on exports to the EU. In this context, Ireland’s commitment to reaching its targets as an IMF country programme country has been recognized by the IMF, the ECB and the European Commission and shows signs of returning to growth, securing a current account surplus in 2011.

During the course of Vice President Xi’s visit to Ireland, discussions were held on the economic, political and cultural aspects of Ireland’s bilateral relationship with China.

Fostering Bilateral Trade and Investment

Enhancing bilateral trade and investment was the primary focus of Vice President Xi’s visit. China is currently Ireland’s largest trading partner in Asia and 10th largest trading partner in the world. At the Ireland China Trade and Investment Forum on 20 February 2012, An Taoiseach, Enda Kenny, TD and Vice President Xi made recommendations (see below) for improving the economic relationship between Ireland and China.

Vice President Xi outlined a five-point proposal which envisaged: (i) The promotion and development of trade in the services sector, including the establishment of a new meeting point for cooperation in service trade that could explore more targeted and complementary products and services; (ii) Increased mutual investment and broader investment cooperation in terms of scope, with the support of the related government agencies; (iii) Enhanced cooperation in new technologies and industries as a “key focus of Ireland-China economic trade cooperation”. Vice President Xi noted Ireland’s “strong advantage” in industry clusters in software development, information and communications technology and other high tech industries; (iv) The establishment of cooperation platforms for SME’s, by the Chinese and Irish Governments, in order to open new channels of investment and trade and create favourable business and investment environments; And finally (v) More effective use of existing cooperation mechanisms and trade associations as bridging organisations that could actively match enterprises in China and Ireland in order to support genuine exchange.

Vice President Xi’s remarks during his visit to Ireland reinforced the importance of Ireland’s agrifood sector to China. He referred to the similarity between China’s current development path and Ireland’s transition from an agriculture based economy to a knowledge-based economy and stated that China could learn from the effective policies that Ireland implemented. He expressed his intent to explore opportunities for cooperation between Ireland and China in this sector, which he proposed would benefit both economies and contribute to global food security.     

Also speaking at the Irish Trade and Investment Forum, An Taoiseach, Enda Kenny, TD, emphasized the “unique package” that Ireland has to offer China: a business friendly environment; a fair and transparent tax system; a well educated, flexible and dynamic workforce; and ease of access to the government, all of which make Ireland a strong base for exporting to key European and global markets. In his speech, he identified China as “one of [Ireland’s] top international priorities for business development” and expressed Ireland’s commitment to delivering a young, well educated and flexible workforce; increased investment in research, development and innovation; a Corporate Tax rate of 12.5%; reduction of unnecessary red tape; and provision of support to growing small and medium enterprises and external investors.

Political Relationship

Ireland’s bilateral relationship with China takes place within a political framework in which China expresses its commitment to an “independent foreign policy of peace”, which it outlined in the white paper, ‘China’s Peaceful Development’. This paper, which was issued by the Chinese State Council in September 2011, argues that China fundamentally respects the independence of other nations and expects other countries to abstain from involvement in China’s internal affairs. Referring to areas of common interest, Vice President Xi said that both Ireland and China have illustrated their commitment to key principles of equal treatment, mutual trust and mutual benefit in pursuit of strong inter-state relations. He identified three key factors of China’s bilateral relationship with Ireland: high-level exchanges, increased mutual understanding and people-to-people exchanges. Vice President Xi also held discussions with the chairs of both houses of parliament on a wide range of political issues, including human rights. Following Vice President Xi’s meeting with President Michael D. Higgins, Tánaiste Eamon Gilmore, TD, remarked that he had underlined the importance that Ireland attaches to human rights, particularly in the context of Ireland’s candidacy for the Human Rights Council of the United Nations.

Educational and Cultural Connection

On the parallels between Irish and Chinese culture, President of Ireland, Michael D. Higgins, said that “Ireland and China are both countries with ancient traditions and modern responsibilities” and referred to the common love of art, culture and sense of family that connect China and Ireland. Vice President Xi stated that the deepening bilateral relationship between Ireland and China illustrates that neither cultural differences nor disparities in social systems and country size are unbridgeable gaps between the East and the West. He added that so long as both nations interact on the basis of equality, mutual trust and mutual benefit, they can “transcend social systems and ideological differences”.

Education is one of the strongest links between Ireland and China. Currently, Ireland hosts an extensive cohort of five thousand Chinese third-level students and approximately 120 programmes have been established between Irish and Chinese universities.

What next?

An Taoiseach, Enda Kenny, TD, has accepted an invitation by Vice President Xi, to visit China in March 2012. Minster for Education and Skills, Ruairí Quinn, TD, is expected to visit China for events surrounding St. Patrick’s Day on 17 March 2012. An Irish agriculture delegation, led by Minister for Agriculture, Marine and Food, Simon Coveney, TD, will follow in April 2012. Finally, Tánaiste Eamon Gilmore, TD, will lead an Irish trade delegation later in the year.

[1] Speaking at the Irish Trade and Investment Forum on 20 February 2012.

[2] Speaking at “Harnessing the Dragon’s Energy: A Sino-Irish Business and Entrepreneurship Seminar” on 17 January 2012, hosted by Dublin City Council, Treasury China Trust and Etihad Airways.

As an independent forum, the Institute does not express any opinions of its own. The views expressed in the article are the sole responsibility of the author.

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