An inter-departmental report commissioned by the Taoiseach on the State's economic performance in Asia recommends the upgrading of its diplomatic presence in China. The report wants the establishment of an Ireland House in Beijing, an increase in diplomatic and trade staff, and the opening of an Irish consulate in Shanghai.
The still-unpublished report, which was delivered to Mr Ahern's office last month, is also understood to recommend easing curbs on the granting of visas to nationals from Asian countries.
It also advocates the creation of an awareness programme designed to educate the Asian public about Ireland and raise the low profile of Ireland in the region; something Asian-based diplomats and trade officials have been recommending for some time.
Mr Ahern set up the inter-departmental group to develop a strategy for long-term development of foreign earnings in Asia after he visited China in September, when he saw for himself how thinly Irish resources were spread compared to other EU countries.
The group was chaired by the Department of Enterprise, Trade and Employment and included representatives of several Government Departments, including Finance and Foreign Affairs, as well as private industry and the Irish Exporters' Association.
The need for Ireland to boost its representation in China was underlined by a study of the resources devoted by comparable EU economies to the world's most populous nation.
Despite its expansion and high growth-rate, Ireland still has the smallest representation of all EU countries in China, except for Luxembourg. Ireland has only five expatriate staff at its Beijing embassy; the Netherlands has 19, Finland 13 and Denmark nine, the report says.
In Shanghai, Ireland has one Enterprise Ireland representative but no homebound staff, compared to the Netherlands' nine, Finland's four and Denmark's two. Most EU countries have a consulate in Shanghai, one of the most important industrial and financial centres in Asia, while Ireland has none.
Official Ireland is also underrepresented in Hong Kong, with no expatriate staff, compared to six for the Netherlands, four for Finland and two for Denmark.
In a separate move, Enterprise Ireland is currently recruiting a full-time Beijing-based manager for China. The emphasis will be on targeting specific sectors and Chinese regions. Though the report recommends Ireland should focus on both China and Japan, it concentrates heavily on remedying deficiencies in China. The Irish presence is also comparatively small in Japan, which dominates the region financially and has a GDP eight times that of China.
If adopted and implemented, the new strategy will mean a shift in focus away from the traditional UK markets, continental Europe and the United States, where Irish trade and investment resources are concentrated.
Money for trade and diplomatic missions abroad has usually followed volume of trade rather than potential trade. The strategy group identified education, services, information technology, telecommunications and food as the five key areas in expanding its Asian engagements.
One of the most vigorous sectors is education, with Ireland attracting a growing number of Asian students to study English and medicine in particular; hence the report's emphasis on the importance of easing visa restrictions. The report is expected to be discussed shortly in Cabinet, which will decide on funding for upgrading the Asia operation.
The Minister for Finance, Mr McCreevy, told The Irish Times in an interview in Hong Kong last year that he was sympathetic to increasing resources to the Asia region. When in China, Mr Ahern noted that as Ireland exported 80 per cent of its produce and China represented 22 per cent of the world's population, more resources were necessary.
He said: "Based on the present approach, we're not going to penetrate the market as it is. Irish exports to China (excluding Hong Kong) increased by 34 per cent to £31.7 million in 1996, principally in electrical machinery, chemicals and telecommunications equipment. But it still ranks only 42nd in total Irish export trade."
Yesterday the governor of the People's Bank of China, Mr Dai Xianglong, forecast that the Chinese economy would continue to expand, growing by 7 per cent this year, compared to 7.8 per cent in 1998.
Editorial comment: page 21