Welcome to Shanghai-on-Shannon

 

Chinese plans to create a city in Co Westmeath that will act as a trading hub for Europe have met with delight and disbelief in almost equal measure. But the project seems to be advancing stealthily, writes MARY FITZGERALD

IT HAS BEEN the talk of Athlone for almost two years. What began as vague whisperings of Chinese investors scouting the midlands town for a major project soon developed into umpteen rumours, each one grander than the last. Local wags spoke of “Shanghai-on-Shannon” – but there were few facts. “It all appeared quite nebulous until the Taoiseach spoke publicly about it in late June,” says Tadhg Carey, editor of the Westmeath Independent. “That seemed to make it more real in the eyes of people here.”

Brian Cowen’s comments failed to shed much light, though he confirmed he had met some of those involved. “It’s about exploring the potential of this idea,” Cowen said.

A week later the Westmeath Independent published excerpts from a preliminary design statement and an image of what the project might look like. It describes “the greatest commercial and trade centre, tour centre, cultural centre, amusement centre and international conference centre in Europe”. The plans include a convention centre in the style of a Chinese palace, two five-star hotels, apartment complexes, a railway station, two bus terminals, a school, a medical centre, a fire station, a six-hole golf course and a 180m tower topped with a rotating viewing gallery.

The heart of the project would be an exhibition area with up to 20 trade halls, a commercial district and a retail service zone. The promoters say it could draw 20,000 to 35,000 visitors per week.

An editorial in the Westmeath Independent captured local sentiment: “The scale of the reported development is mind boggling . . . Athlone would become a city, almost overnight, and its focus would clearly move eastwards.”

The story caught the attention of the international media. The Guardian drew comparisons between the concept and Beijing’s recent investments in Greece under the headline “Ireland at forefront of Chinese plans to conquer Europe”. It wrote: “Ambitious Chinese companies are pouring money into cash-strapped Ireland and Greece to gain a foothold in Europe.” Before long, local councillors were fielding calls from journalists in England, France, the US, Germany, the Netherlands and China.

“They were curious as to why a small town in the midlands of Ireland could be the focus of something so big,” says Aengus O’Rourke, Fianna Fáil councillor and son of local TD Mary O’Rourke. She met the prospective investors last year through Ken So, who owns Ken’s Oriental Restaurant in the town and is a long-standing family friend. Aengus O’Rourke describes So as a “facilitator” for the investors.

His mother was given a detailed presentation on the project. “They laid the plans out on my living room floor,” she says. “It was all very intriguing and even a little mystifying.”

Her initial response was that it would present a good opportunity, she recalls, until the investors began to talk of who would work there. “They were proposing that all the people employed in the building and the manning of it would be Chinese. I told them I didn’t think that would be acceptable. We would need a mix of Chinese and Irish. They were talking about 12,000 people but, at that time, the plan was very vast, very fanciful. As I understand it, they have now changed their plan.”

She introduced the investors to her son, who was president of the local chamber of commerce. He arranged a meeting with his cousin Conor Lenihan, who was minister for integration. Those at the meeting included a British-based businessman of Chinese origin who works in logistics and food imports, and several Chinese investors who spoke through an interpreter. “The people who came from China are very big players there, employing several thousand people each,” she says. “They work in areas including electronics, home wares, lighting and green energy. They are very serious and very successful businessmen.”

More meetings followed, including with the Taoiseach. The promoters met the Minister of State for Housing and Local Services, Michael Finneran, several times and he visited their Beijing offices during a St Patrick’s Day trip this year. The site of the proposed development, in Athlone’s eastern hinterland, falls within the boundaries of what was designated a developing area by the Department of the Environment in 2008, and therefore comes under Finneran’s brief. (Developing areas are those identified in the National Spatial Strategy as fast-growing and in strategic locations.)

In September, speculation in Athlone intensified after councillors voted to approve a local area plan comprising 302 hectares in Creggan on the town’s eastern fringe. Many noted parallels between it and the Chinese proposal.

“The language used in terms of the objectives of the local area plan is striking,” says Carey. “It talks of developing Creggan as a ‘world-class enterprise, innovation and trading hub’. That is not the sort of language you have in normal local area plans in the midlands.

“There is no denying that the local area plan is a de facto zoning blueprint for development of this scale, size and type. It would appear to the outsider that it has been designed as such, and the similarities are not accidental. That has added to the public interest.”

Attempts to contact the investors and the two local developers who own the site proved unsuccessful. Others involved in different aspects of the plan declined to comment. Many who have met the investors describe the proposed facility as like a permanent trade fair.

“What is being proposed is a massive trading hub, which will allow Chinese companies to display their wares in large exhibition halls for the European market and beyond,” says Finneran. “Buyers will be able to do all their purchasing in one location instead of going to China, where they might have to travel to several cities. This will save them a lot of time and money.”

He says reports in the international media that the complex will include factories are inaccurate. “There is no question of any manufacturing being done here,” he says.

Co-operation with China is nothing new for Athlone, which has forged links over the past decade, mostly under the direction of Prof Ciarán Ó Catháin, president of Athlone Institute of Technology (AIT). “We could see China was fast becoming a global power and we were interested in partnering with some of the leading drivers of that development,” says Prof Ó Catháin. AIT has established exchange programmes with higher-education and research institutions in such cities as Beijing, Shanghai, Nanjing and Dalian. Several hundred Chinese students come to Athlone every year and the institute offers Mandarin classes. Chinese ambassador Liu Biwei has been a frequent visitor to the town.

The Chinese embassy says it had few details of the proposed trade hub, however. “This is a private investment project,” a spokeswoman says. “We have no further information.”

A spokesman for the Taoiseach says the Athlone plan did not feature in discussions on trade and investment when Cowen met visiting Chinese officials in September. The delegation led by Li Changchun, a senior Communist Party of China official, represented the highest-level visit since premier Wen Jiabao came to Ireland in 2004.

Cowen said he had stressed to them that Ireland was ideally placed to become a gateway to Europe for China. “We have been a great gateway for US investment into Europe and I think we can do the same for Chinese investment,” he said, adding that Ireland has important advantages, including being the only English-speaking country in the euro zone. He is to lead a trade mission to China early next year.

Duncan Freeman, who researches EU-China trade and investment at the Brussels Institute of Contemporary China Studies, says the language could be a major pull for the Chinese investors. It is understood they also looked at several other sites across Europe. “Given that English is the international business language, it is an important factor for a lot of Chinese companies,” says Freeman.

“The favourable tax regime is also likely to be a factor, as is the fact that Ireland is seen as having, in terms of regulation, a relatively business-friendly attitude. From the Chinese perspective, this makes it more appealing than some parts of Europe, which are seen as bit too complicated and difficult.”

One persistent rumour in Athlone concerns the number of jobs and how many would be filled by Chinese nationals. “There are reports that if this comes to fruition, some 2,000 of the people employed there would be Chinese,” says James Bannon, a local Fine Gael TD. “I would have reservations about the prospect of a self-contained community separate to Athlone. Jobs for local workers should be a priority. We need more information about what exactly is being proposed. There is an onus on the Government to be more upfront about this. At the moment no one really seems to know what is happening.”

That could all change soon. It is understood that a formal planning application is to be lodged with Westmeath County Council early next month.

Such is the scale of the proposal, however, that many in the town remain sceptical. “Some people’s attitude is we’ll believe it when we see it,” says Aengus O’Rourke. “It’s that big.”

Why China is investing in Europe

When the Chinese premier, Wen Jiabao, addressed the EU-China business summit in Brussels last month, he mixed honeyed words with pointed reminders of how Europe’s financial crisis had changed the parameters of its relationship with Beijing.

After years of focusing its investment efforts on Asia and Africa, China has set its sights on Europe, wooing troubled euro zone economies with deals worth billions.

Wen said the EU is now China’s largest partner in trade and investment, ahead of the US and Japan. He spoke of how Beijing had acted as a “friend” by buying bonds and helping Greece, Spain, Portugal and Italy in “their most difficult time”. His words echoed those of the Taoiseach, Brian Cowen, after a meeting with Li Changchun, a senior Chinese official, in September. He “was very clear that China would be as helpful as it can to a friend like Ireland in the difficult times we have”, he said.

Some of Beijings biggest deals have been in debt-ridden Greece and Italy. One allows Cosco, China’s state-run shipping firm, to turn the Greek port of Piraeus, Europe’s largest for passengers, into a regional entry point for Chinese goods. Cosco has similar plans to expand the port at Naples. There is talk of Chinese money being funnelled into Greek shipbuilding and telecommunications, as well as infrastructure projects including roads, railways and airports in eastern and southern Europe. Last year the China Overseas Engineering Group was accused of undercutting European bids when it landed a contract to build a highway in Poland.

“The slide of the euro has slashed business operation costs in Europe and has made investing there much more attractive to Chinese businesses, Zhou Jizhong, a professor at Shanghai University of Finance and Economics, told Asia Timesearlier this year.