China's still-thriving economy is a target of Irish trade policy

Business fairs and the forging of strong links help to strengthen Sino-Irish commerce, writes SUZANNE LYNCH

LAST MONTH, 350 business leaders from the Chinese and Irish business communities gathered in Dublin for the Ireland-China Economic Trade Co-operation Forum organised by the Irish China Association. The event played host to the biggest-ever Chinese delegation to visit Ireland, with representatives from over 80 Chinese companies taking part.

Meanwhile, the Department of the Taoiseach is preparing the Irish stand for the 2010 World Expo which will run from May until October in Shanghai.

Ireland, it seems, is taking China seriously. It’s easy to see why. China is one of the few countries to have experienced economic growth this year. Though not immune from the effects of the global downturn – manufacturing output and exports were down in the first half of the year for example – the world’s third-largest economy grew by just under 9 per cent in the third quarter of 2009, while the government announced on December 21st it is targeting growth of 8 per cent for 2010. Add to this its position as one of the largest markets in the world and it becomes clear China represents a serious business opportunity for companies interested in investment and trade internationally.

According to Enterprise Ireland, there are 250 small- to medium-sized Irish companies engaged in trade with China, while 107 have offices there. This is in addition to the larger multi-national and Irish-listed companies with a presence in China.

It’s a number that looks set to increase. “We are definitely seeing a rise in day-to-day interest from Irish companies interested in doing business in China,” says Alan Buckley, Enterprise Ireland’s China director. The State agency now has four offices in China.

Dublin-based waste management company Greyhound Recycling and Recovery is one Irish company that has successfully penetrated the Chinese market. Almost 10 years ago, the company began exporting recycled paper products to China; today, the company’s Chinese business is worth $15 million a year. “We began to look at China as a possible market, mainly due to the price it was offering for mixed paper and cardboard, the commodity we produce,” says managing director Brian Buckley. China’s position as the world’s leading consumer of raw materials made it an obvious export market. After initiating trading links with Chinese manufacturers through contacts in the European waste-management industry, Greyhound built up a customer base in China, initially focusing on the Shanghai region. It now supplies recycled paper and packaging products to manufacturers across the eastern seaboard of China.

Buckley says that while doing business in China was a challenge initially – not least because of the language barrier – a pro-business mentality underpins the communist ethos. “Once you make the initial contact, it becomes easier. The key is to build up relationships with your trading partners. Reputation and trust are very important to the Chinese. Many Chinese businesses haven’t heard of Ireland… you need to earn their trust.”

He believes Irish companies keen to establish links with China need to visit the country. “Trade shows in particular are a great way of making connections.” But while more and more Irish companies like Greyhound are looking to expand into China, the Government is also keen to attract Chinese companies to Ireland. Currently only a handful of Chinese companies have operations here – Chinese infrared technology company Satir which opened its European headquarters in Dundalk in 2008 is one of the best known.

Promoting Ireland as a gateway into Europe was a major theme of the recent Ireland-China Economic Trade Co-operation Forum organised by the Irish-China Association. The IDA is also eager to secure Chinese foreign direct investment. Brian Conroy, the IDA’s Asia-Pacific director, based in Shanghai, says the agency is actively targeting Chinese companies looking to set up centres in Europe. “Ireland’s corporate tax-rate and our double-taxation agreement with China, makes it an attractive location for Chinese companies,” he says. “What we are saying to companies is that Ireland isn’t just a market of four million people – it offers a gateway into the entire European market.”

The possibility of increased business activity between Ireland and China is also fuelling its own micro-industry. Companies such as Dublin-based Euro China Hub have mushroomed in recent years, offering financial services to Chinese companies interested in setting up in Ireland and vice versa.

Law firms and accountancy practices are also tapping in. “We are finding that, increasingly, our clients want to do business in China so we need to be in a position to execute contracts,” says Jeanne Kelly, Partner at Mason Hayes and Curran. The company employs a number of Mandarin speakers and has two trainees on secondment in China.

Thinking long-term is vital if Ireland wants to secure a healthy level of foreign direct investment, and protect its export market, says Conroy. “Yes, the US and Europe are important trade partners, but we also have to be conscious of emerging markets.” He says having focused on the domestic market, Chinese firms are looking further afield. “Because a large proportion of Chinese companies are in existence since the 1970s, they have only had to focus on their home market. Now these companies are . . . looking to expand, and gain market share in Europe. The challenge for Ireland is to make sure . . . we’re at the forefront of their thinking.”