Republic must turn towards China for economic salvation

 

OPINION:There is enough respect and sufficient common interests for the states to build a fruitful future

IRELAND NEEDS a new economic strategy. Dependence on the European Union and United States has its limits as neither will grow fast enough to pull us out of depression.

The one part of the global economy that is expanding is China. It alone has the potential to transform our prospects and spark a new growth trajectory. My proposal is that we join this new wave in world affairs and become one of China’s long-term trusted strategic partners.

The rationale is simple: China is set to be the dominant global economic force. It will continue to expand as it has for the past 30 years, and countries which partner with Beijing will have most to gain. This means we should establish a relationship built around China’s needs and our competitive strengths.

The alliance will have to be cultivated on a state to state basis because China is a hierarchial society. To capture and retain their attention requires that we too are similarly led, and means that managing the partnership becomes the direct responsibility of the taoiseach of the day. While a great deal has been done over the past decade to increase trade and deepen links with China we need to lift the relationship to the highest political level and place Chinese affairs under the direct authority of the taoiseach.

While its primary role would be to frame and co-ordinate government policy it would need to be complemented by two other agencies, with one dedicated to Chinese policy studies and the other focused on implementing government policy decisions on China. A think tank would fill in a serious gap in our understanding of Chinese affairs and a permanent taskforce would ensure public and private sectors worked together co-operatively.

Taoiseach Enda Kenny will be paying an official visit to China soon and this would be the perfect opportunity to communicate the new strategy to the leadership there; to indicate what we intend to contribute to China’s development and how we in turn would hope to benefit.

Given the disparity in the size of our economies and because of distance there is a clear limitation on what we can contribute in terms of manufactured goods. But high-quality foodstuffs are an obvious candidate in light of our comparative advantage in grass products and the Chinese need for protein. Specialist services in education and health are other areas of potential.

Addressing the Chinese Economic Association last July the Taoiseach listed sectors that offered export possibilities, including energy and food.

Perhaps the area of greatest interest to the Chinese would be to propose the Republic as their European bridgehead, as we have performed this function for the US for three decades.

It could take three forms: first, Chinese manufacturing firms could be encouraged to set up here, the surest way to prevent the erection of trade barriers against their exports into the EU. It would also shorten their distance to market.

Second, the Republic could facilitate the establishment of a significant Chinese presence in the European financial sector. That’s going to happen anyway, but the IFSC has ready-made advantages which would short-circuit the entry process for Chinese banks and financial institutions.

Finally, the Republic could become the location of choice for large Chinese companies intent on developing a global presence in the light of the “Going-Out” policy which is now part of China’s own national strategy. All three together would constitute a substantial bridgehead for China within the EU and leverage the relationship between our two countries into something special.

To dramatise the launch of the new strategy a list of practical measures could be announced by the Taoiseach in Beijing:

* New visa arrangements that would offer China the same entry facilities as the US enjoys;

* The introduction of Mandarin into the secondary school system;

* The introduction of a direct weekly flight from Dublin to Shanghai or Beijing;

* The launch of an institute of Chinese affairs;

* The promotion of the Republic as a destination for Chinese tourists;

* The creation of a student exchange programme at second and third levels, with a specialist scheme for doctoral candidates.

The Chinese see a similarity between the states. Culturally, they see affinities in the value we place on family and friendship.

There is fertile ground for a partnership built on common interests and mutual respect. If we want a secure economic future then we should go for it.


Eddie O’Connor is chief executive of Mainstream Renewable Power