Encouraged by captains of Irish industry, who should know better, Opposition politicians with an agenda, and armchair critics within the tabloid and online media, a degree of pessimism appears to be growing among Ireland‘s small to medium (SME) sized business sector regarding the ‘risk versus reward’ futility of getting involved in Chinabusiness. More mature markets in EU and the USA are being represented as offering more scope to grow for Irish SMEs with the right value proposition.
Irish businesses no matter what their size cannot afford to be pessimistic about China and here is why.
“…China’s transformation is one of the defining facts of our lifetime. Last year China became the world’s largest trading nation. Next year China is set to become the world’s largest importer of goods and later this century it will become the world’s biggest economy.
We should be clear that there is a genuine choice for every country over how to respond to this growing openness and success. They can choose to see China’s rise as a threat or an opportunity. They can protect their markets from China or open their markets to China. They can try and shut China out – or welcome China as a partner at the top table of global affairs..”
The British Prime Minister Mr. David Cameron, on the eve of his second official visit, in an article published this week in Caixin (pronounced ‘sigh sheen‘), China’s financial news heavyweight, couldn’t have been more explicit about China’s growing importance.
Most China watchers will agree that – largest, longest, fastest, biggest, greatest, tallest superlatives aside- China is still in the very early stages of its re-emergence: Get in on the ground floor now and potentially be in the happy position of earning revenue hand over fist.
Sure China is no cake walk. At the beginning, building a China market presence from scratch involves hassles, stumbles, issues, errors, problems, stresses and utter confusion. Yet, isn’t that what getting in at the beginning of any start-up business or market looks like? The only way to WIN is through hard work, support, communication, committment, patience, and understanding that there will be many instances of having to deal with a lot of confusion. Similar to a start-up company, these are the learning steps that must be taken to break new ground and grow a viable market presence in China.
In a start-up there also comes a point when the challenges start to be overcome and things begin to gel together. And so to in insatiable China where the surmounting of challenges and barriers or difficulties will open the way to doing fantastic things and improving on a daily basis faster than would have happened in more traditional, mature, markets.
With certain senior business executives and media in Ireland advocating a niche market approach for SMEs with respect to China [“China is a … slow burn” (Mr. Sean O’Driscoll, CEO Glen Dimplex); “More fortunes have been lost than made by getting in too early,” (Liam O’Mahony, Chairman, IDA Ireland) “Putting Mandarin on the school curriculum is a typical proposal from armchair ‘experts’ who have no experience of the challenges of selling in China – – 1.3bn consumers and all we need is a very tiny slice of the pie!” (Michael Hennigan, Editor of Finfacts.ie)] the crux of this Accurate China Insight is to draw attention to the fact that almost all of Accurate Group’s Irish clients, no matter what size, doing business in China or with China succeed at it, while the vast majority of European and American companies in China are flourishing.
Moreover, we do not share the view that China is a particularly risky market for foreign companies. Like any foreign market with a unique language, business culture, and legal system something can go wrong. However, despite the challenges China remains, will continue to remain a very profitable place to do business, which is really what matters most for Irish businesses.
Returning to David Cameron:
China is at a defining moment. It has just announced bold reforms that show real ambition to free its markets and open them up to foreign participation…
As Chinese cities expand dramatically and Chinese people become more prosperous, Britain has the world-class goods and services they need…
Building on the recent launch of EU-China negotiations on investment, and on China’s continued commitment to economic reform, I now want to set a new long-term goal of an ambitious and comprehensive EU-China Free Trade Agreement. And as I have on the EU-US deal, so I will put my full political weight behind such a deal that could be worth tens of billions of dollars every year…
We should recognise that China’s economic transformation is happening at 100 times the scale and 10 times the speed of Britain’s own urbanisation two centuries ago. In the last 30 years, China has made unprecedented social and economic achievements. The recent meeting of China’s leaders – the Third Plenum – has now set a clear goal: comprehensive reform, including issues such as governance and the judicial protection of human rights, and recognising that all types of reform are inextricably linked. The promise is of an economy with a more predictable legal environment and with stricter enforcement of protection for intellectual property rights…
The fact is that businesses thrive in a stable, secure and corruption-free environment that limits the risk of shock, provides certainty of dispute resolution and offers protection of capital and intellectual assets. These conditions are good for growth in China…
Ireland’s SME’s should be able to determine a new China business model that suits their situation. Top management and business owners who are destructively determined to succeed by increasing efforts to ‘do more of the same better’ in their traditional markets and ignore the potential of China are going to lose out in the medium and long term.
Irish businesses across the board need to intensify efforts to tap the China market otherwise they will be left behind.
Discussion paper presented by Niall O’Reilly at 6th International ‘Life & Development Forum’ – “We Make Life Better – Hangzhou, White Horse Lake Jianguo Hotel , November 8-9, 2013.
Sustainable development is a continuous, guided process of economic, environmental and social change aimed at promoting the well-being of citizens now and in the future. To realise this requires creating a sustainable and resource efficient economy founded on a fair and just society, which respects the ecological limits and carrying capacity of the natural environment (Source: Wikipedia)
In 2013, the economic situation in Ireland is dramatically different to the earlier part of the last decade, when Ireland was known as The Celtic Tiger. Measured against the standard indicators of GDP, and GNP – trends for economic development, new housing output, tax revenues, and employment levels have dropped sharply.
We have also seen rising unemployment, a banking crisis and a collapse in the property market after a sustained, if unsustainable, boom in the property market. A number of factors drove these unsustainable trends, including: rapid growth in employment, large scale inward migration (annual immigration rose sharply from 52,600 persons in 2000 to peak at 109,500 in 2007) (2), rapid natural population growth (17% increase between 1996 and 2006), fiscal incentives for the construction sector, rising car ownership and weakness in the strategic approach to spatial planning.
At a time of rapidly rising prosperity and development, the existing structures and controls were not strong enough to withstand the pressures that unavoidably arose.
This legacy leaves Ireland facing huge challenges in the period ahead, challenges that are all the more serious when set against the backdrop of a global economic downturn.
The sustainability pressures on the economy continue to be high and while some progress has been made, there is still a distance to travel before Ireland can fully remove itself from what is the most serious fiscal and economic crisis in the history of the Republic of Ireland.
In meeting the challenge, the Irish Government is implementing a radical Framework for Sustainable Development for Ireland – a national recovery agenda, which seeks to integrate sustainable development principles into policy making across all sectors, for the purpose of stimulating:
the transformation of public services
economic growth based on knowledge and innovation
an inclusive, high employment society
a greener low carbon economy
and a good quality natural and built-environment so that Ireland can once again prosper on a competitive global stage.
Lessons must be learnt from Ireland’s recent experience and Ireland will have to ensure structures and systems are put in place that are strong enough to survive periods of pressure which might threaten to weaken sustainable growth and fiscal stability.
It is widely accepted that economic growth, social unity and environmental protection are equally important targets for meeting the prime objective of delivering well-being in a diverse multi-cultured society that promotes participation, a society in which everyone takes responsibility for the environment.
While the establishment of a more sustainable pattern of development for Ireland is one of the key challenges of government and ultimately for society, there is also a clear consensus that a return to ‘business as usual’ is not an option.
At a global level there is a growing consensus that the world’s systems of production and consumption cannot be sustained without posing a huge threat to the environment and to human health. Water scarcity, air and water pollution, climate change, resource depletion and irreversible biodiversity loss are problems that have to be tackled as a matter of priority.
Consensus is now focusing around the need to put economies on a more sustainable, green growth path on the basis that the cost of sustaining biodiversity and ecosystem services is lower than the cost of allowing biodiversity and ecosystem services to decline.
For Ireland ‘green growth’ and the ‘green economy’ are now fundamental aspects of Government policy as the country shifts away from the ‘brown economy’ on the road to becoming a low-carbon, competitive, resource efficient and climate resilient country, policy which will ultimately improve its citizens’ well-being and social equity, while significantly reducing environmental risks and ecological scarcities.
Economic, environmental and social progress are mutually related.
Ireland’s Framework for Sustainable Development
This Framework contains measures to help meet the overall goal of achieving continuous improvement of quality of life both for current and for future generations.
The following set of 7 principles for sustainable development are the central aspects of this Framework for Sustainable Development for Ireland:
In relation to “economy”, the principle seeks “to promote an innovative, competitive and low carbon economy with the aim of achieving smart, sustainable and inclusive growth” and to reduce pressure on natural resources
In relation to “satisfaction of human needs by the efficient use of resources” the key objectives are that:
(a) “Prices should reflect the real costs to society of production and consumption activities and polluters should pay for the damage they cause to human health and the environment”
(b) “The needs of current generations should be addressed without compromising the ability of future generations to meet their needs”
(c) “Resources should be used within the capacity for regeneration”
3. In relation to “respect for ecological integrity and biodiversity” the Framework seeks to ensure that “the abundance of wildlife and extent of habitats should be maintained, improved and restored where necessary, through sustainable management”
4. In relation to “social equity” the main principle is that “social inclusion should be promoted to ensure an improved quality of life for all”
5. In relation to “respect for cultural heritage and diversity” the Framework will ensure that “the quality of landscapes, the heritage of the man-made environment and historic and cultural resources should be maintained and improved”.
6. In relation to “Equity between countries and regions” Ireland will:
(a) “promote fundamental rights, by combating all forms of discrimination and contributing to the reduction of poverty”
(b) “promote consistency between local, regional, national, European Union (EU) and global actions in order to increase their contribution to sustainable development”
7. The 7th and final theme of Ireland’s Framework for Sustainable Development relates to good “decision-making”. In this regard, the framework will aim to:
(a) Guarantee citizens’ rights of access to information and public participation procedures.
(b) Ensure citizens’ access to review mechanisms.
(c) Develop adequate consultation with all interested parties, including citizens, businesses and social partners (such as trade unions), and develop participatory channels for all such interested parties.
Of course there are challenges.
Ireland’s Sustainable Development Framework catagorises 12 the key challenges under the following themes:
Sustainability of public finances and economic resilience.
Sustainable consumption and production.
Conservation and management of natural resources.
Climate change and clean energy.
Social inclusion, sustainable communities and spatial planning.
Education, communication and behaviour change.
Innovation, research and development
Skills and training
The 12th challenge is how to address global poverty and sustainable development.
I will now briefly explain Government-led initiatives regarding two of these themes: sustainable transport and public health
Smarter Travel – A Sustainable Transport Future
Transport, which is a key element of a sustainable development strategy, should be closely aligned to land use planning and the need to create more sustainable communities.
Sustainable transport is central to Ireland’s efforts to combat climate change, air pollution and other negative environmental and social impacts.
Transport trends in Ireland from the mid 1990’s onwards are unsustainable. The main problems associated with transport in Ireland are:
Rising pollution – greenhouse gases and particular air pollutants which are detrimental to health and the environment such as nitrous oxides (NOx) and volatile organic compounds (VOCs).
Increasing congestion on roads that lengthens journey times, adversely impacts on family, leisure time, and community life, contributes to the growing problem of obesity, and adds to pollution and costs at many levels including affecting Ireland’s national competitiveness. In Ireland there is a clear appetite to abandon the car for commuter driver, if only this were practical.
Safety also remains a key issue despite the steadily decreasing numbers of road deaths.
In addition, a key characteristic that distinguishes energy use in transport in Ireland is the almost total dependence on oil as a fuel and on import dependency, over 99% in both cases.
Without intervention, congestion will get worse, economic competitiveness will suffer, quality of life will deteriorate and carbon emissions from the transport sector will grow.
In order to achieve a sustainable travel and transport system by 2020, Ireland needs to change its unsustainable behaviour and habits as a nation and as individuals.
Sustainable and smarter transport measures currently being implemented by the Government under the Framework for Sustainable Development are set out in four key goals:
Goal 1 – to “reduce overall travel demand and the distance traveled by private car” and encourage smarter travel, including
focusing population and employment growth in sustainable compact forms, which reduce the need to travel for employment and services
using pricing mechanisms or fiscal measures to encourage behaviour change and discourage people from using the car unnecessarily.
Goal 2 – to “maximise the efficiency of the transport network” by ensuring that alternatives to the car are more widely available mainly through a radically improved public transport service and investment in cycling and walking.
Goal 3 – to reduce reliance on foss1il fuels and emissions by improving the fuel efficiency of motorised transport through
improved fleet structure
energy efficient driving
Goal 4 – to improve accessibility to transport.
To achieve these goals the Government is pursuing a number of key targets such as:
Dramatically improving the placement of spatial and transport planning to stop urban sprawl, and urban-generated one-off housing in non-urban areas
Encouraging e-working through better broadband provision
500,000 more people will take alternative means to commute to work (200,000 people will switch to cycling and walking) to the extent that the total share of car commuting will drop from 65% to 45%
Alternatives such as walking, cycling and public transport will be supported and provided to the extent that these will rise to 55% of total commuter journeys to work
The total kilometres travelled by the car fleet in 2020 will not increase significantly from current levels
A reduction will be achieved on the 2005 figure for greenhouse gas emissions from the transport
These key targets are ambitious. However, they are necessary to improve the quality of life of Ireland’s citizens, to secure future energy supply, and to ensure that the transport sector substantially reduces greenhouse gas emissions, in line with the need for all developed nations to do so. These targets represent a complete turnaround in the current trends. They mean that the Irish public must radically alter how they travel, and that Government priorities in the transport sector must move towards more sustainable modes.
Smarter Travel and Sustainable Transport Ideas:
Specification of a maximum permitted level of car parking for Government offices and commercial sites, which have suitable public transport facilities and are within walking/ cycling distance to amenities
The adoption of flexible working policies. The Government has provided leadership in promoting such flexible policies in the public sector
Ensuring that every school and college in Ireland has a school travel plan to encourage students to take alternatives to the car.
Government commitment to a culture of walking in Ireland
A car-sharing website which will help employers to encourage such initiatives in the workforce.
One smart-card to pay for all forms of public transport
Conversion of taxi and public bus fleet to alternative fuels.
A Healthy Ireland
Public health protection is an essential goal for society in delivering well-being and quality of life. Ireland has made significant progress in regard to the health of its population, but some key challenges remain.
The rise in life expectancy in Ireland during the past decade has been unmatched by any other country in Europe with the greatest gains in the older age groups reflecting decreasing mortality rates from major diseases.
In fact, the most important statistic from a health perspective is the number of people over the age of 65 which is projected to increase from over 500,000 now to over 1,300,000 in the next 30 years with the greatest proportional increases occurring in the 85+ age group.
However, Ireland’s ageing population, together with negative trends in obesity (60% of adults are obese), diet, exercise and other risk factors – such as smoking [6,000 deaths a year), and alcohol abuse (related road accidents cost over Euro 600 million a year) means that the level of chronic health conditions will certainly increase.
In addition, there are a range of social determinants of health, for example social exclusion, education, health services, the built environment and lifestyle choices:
People who are less well off or who belong to socially excluded groups tend to fare badly in relation to these social determinants
A healthy environment is also absolutely linked to the health of Ireland’s population which relies for survival on clean air and water and the crops we are able to grow in uncontaminated soil. Public amenities such as forest parks provide opportunities for recreation and add to our understanding of the environment thus supporting healthier lifestyles while contributing to our well-being.
The Irish Government’s Healthy Ireland frameworkis about taking important steps towards making Ireland a healthier and more prosperous country in which the whole population enjoys the best possible health and well-being.
It is designed to include Government Departments, local authorities and public bodies, businesses and employers, sports and voluntary groups, communities and families.
Initiatives within the Healthy Ireland Framework have four goals:
Goal 1: Increase the proportion of people who are healthy at all stages of life:
This means addressing risk factors and promoting protective factors at every stage of life – from pre-natal, through early childhood, adolescence, adulthood and into old age, to support lifelong health and well-being.
Initiatives in this context include:
Increasing the number of adults (by 5%) and children (6%) with a healthy weight by 2019
Increasing by 20% the proportion of adults eating the recommended five or more servings of fruit and vegetables per day
Reducing smoking among young people by 1% a year
Decreasing levels of self-harm across all life stages
Increasing by 20% of proportion of the population undertaking regular physical activity
Goal 2: Reduce health inequalities:
Health and well-being are not evenly distributed across Irish society. This goal requires not only interventions to target particular health risks, but also a broad focus on addressing the wider social determinants of health – the circumstances in which people are born, grow, live, work and age – to create economic, social, cultural and physical environments that foster healthy living.
Initiatives in this context include:
Increasing the ‘stay at school’ rates of students in second-level schools
Reducing the % of the population in consistent poverty from current 6% to 2% or less by 2020.
Increasing self-reported happiness and well-being across socio-economic groups.
Goal 3: Protect the public from threats to health and well-being:
The Healthy Ireland Framework is designed to ensure effective strategies and interventions to protect the public from new and emerging threats to health and well-being are implemented. Being prepared to prevent, respond to, and rapidly recover from public health threats through collaborative working is critical for protecting and securing the population’s health.
Initiatives in this context include:
Increasing immunization rates for children to 95% uptake
Reducing prevalence of food-borne infections in compliance with Ireland and EU legislation
Complying with indicators defined in International Health Regulations, World Health Organisation (WHO).
Goal 4: Create an environment where every individual and sector of society can play their part in achieving a Healthy Ireland:
It is beyond the capability of any one Government Department or organisation to promote society-wide health and well-being. This can only be done through society-wide involvement in and engagement with health and well-being promotion and improvement activities – from individuals making positive lifestyle choices and projects run by community and local groups, to policy and legislative changes at the highest level of government.
Initiatives in this context include:
Establishing key indicators measuring the level, range and effectiveness of cross government collaboration and effectiveness of structures.
Increasing percentage of people participating in informal, unpaid charitable work.
The current health status of people living in Ireland, lifestyle trends and inequalities in health outcomes are leading Ireland toward a future that is dangerously unhealthy and very likely unaffordable. The work that is underway to build a health service that is accessible and fair will only succeed if Ireland builds an environment that supports people and their families to lead healthier lifestyles.
Evidence and experience from around the world clearly shows that to create positive and sustainable change in health and well-being, it takes the involvement of the whole community, the whole of Government, all of society working in unison.
In conclusion, having endured the worst crisis in the history of the Republic of Ireland, by placing Sustainable Development as a critical component in Ireland’s Agenda for National Recovery the Government is clearly focused on pursuing coherent policies and sustainable actions for the health and well-being of the country’s most valuable asset: Its people.
Given Ireland’s present economic condition investment in the necessary infrastructure elements of the Framework for Sustainable Development will be challenging. However, the real challenge is to change mindsets, so that Ireland’s institutions and individual citizens realise the benefits from altering their behaviour for the common good.
Managing Director, Accurate Group Ireland China Market Makers (Route to Market, Export, Import, Partner Due Diligence)
Recently he has been very much at the forefront of EU-China dialogue:
Prior to his visit to Ireland Vice Premier Ma is leading the Chinese delegation at the fourth High-Level Economic and Trade Dialogue taking place today in Brussels to discuss trade and investment frictions.
Last week he also co-hosted with Chancellor George Osborne the recent 5th UK-ChinaEconomic and Financial Dialogue at which London’s role as a global offshore hub for RMB trading and consequently a hub for RMB investment into China were strengthened.
On his visit to Ireland Vice Premier Ma will possibly be accompanied by Trade Minister Gao Hucheng and it will be interesting to see whether the potential for cooperation with our own financial sector, as in IFSC, is raised in deliberations with their Irish counterparts. Or perhaps in the face of moves towards EU tax harmonisation and recent coups regarding London’s role as a global offshore hub for RMB trading the Chinese no longer view the IFSC offering as being attractive, if they ever did.
…..Or at least that’s what reading between the lines would appear to reveal as being the over-riding objective. Today in an address to the European Parliament’s International Trade CommitteeRichard Bruton TD, Ireland’s Minister of Jobs, Enterprise and Innovation, stated:
“..It was evident at the last Summit that there is considerable richness and potential in our relationship with China. We would like to prepare the ground for the next summit so that the conditions would be ripe to launch negotiations for a landmark investment agreement with market access..”
The paragraph immediately preceding this statement refers to FTA [Free Trade Agreement] negotiations with Japan and India, while further down in his speech the Minister speaks of FTAs with individual ASEAN members.
While the specific language used in relation to China talks about “…a landmark investment agreement with market access..”, given the overall context in which the speech was made, the implication is clear – an FTA between the EU (European Union), China’s largest tradingpartner, and China is the ultimate goal. Such an objective marks a hugely significant turning point in the development of the EU’s China engagement strategy: Marriage is on the cards.
The visit to Ireland in February 2012 by paramount leader General Secretary Xi Jinping, which was hastily followed up by Irish Prime Minister, Taoiseach Enda Kenny‘s return trip to Beijing the following month, not only demonstrates that China, the EU’s second largest tradingpartner, would make for an eager marriage companion, but it also signifies China backing for Ireland’s unilateral embracement of the role of EU–China marriage maker as a key feature of its Presidency of the Council of the European Union.
Given Minister Bruton’s speech to European Parliament’s International Trade Committee, the acknowledgement by General Secretary Xi Jinping at his March 2012 reunion with Taoiseach Enda Kenny in Beijing that …
“… The development of China-Ireland relations can serve as a driving force in boosting China-Europe ties..”
Going forward, Ireland’s eager and unilateral adoption of the role of ‘marriage maker’ would seem to indicate a future political relationship with Beijing deriving far more economic benefit to the country than its trading relationship.
As noted in the Accurate China Insight dated 20th November :
“…Ireland’s Presidency of the Council of The European Union provides a fantastic opportunity for Ireland to yet again punch above its weight in the eyes of China’s leaders and media……. Moreover, EU-China -related summits in Ireland will provide Europeans with their first real chance to measure the mind-set of China‘s new leadership towards its biggest trading partner…”
Commencing in January, for the first half of 2013, Ireland‘s Presidency of the Council of The European Union provides a fantastic opportunity for Ireland to yet again punch above its weight in the eyes of China‘s leaders and media.
Moreover, EU-China -related summits in Ireland will provide Europeans with their first real chance to measure the mind-set of China‘s new leadership towards its biggest trading partner.
Hopefully the relevant agencies Tourism Ireland, Bord Bia, Enterprise Ireland, Industrial Development Authority of Ireland (IDA), etc., have given due consideration to the huge marketing potential this unique six month long occurrence offers.
Following on from a very successful trip to Ireland in February 2012 by the incumbent General Secretary of the Communist Party of China, China’s paramount leader Xi JinPing, expect an enduring stream of visits by Chinese leaders and media to our shores, wowed by loads of Irish hospitality (whether a caman, sliotar, bodhran, uilleann pipes, Irish coffee, Guinness, visits to Irish farms), intertwined with stunning rustic backdrops, a clear understanding of what Ireland has to offer as world-class centre of excellence in sciences, software and telecoms, financial and education services, and in terms of investment and Euro Zone access opportunities for Chinese companies: All aimed at ensuring their visits to Ireland will be in their minds for a very long time when they return home to China.
Given Ireland’s financial predicament the need for hard cash in order to create jobs makes for an enticing prospect of going it alone and negotiating a Free Trade Agreement between Ireland and China.
However, cutting a separate deal with China for more business deals over the short-term would be viewed as playing into a China strategy aimed at splitting EU unity by buying off so called ‘peripheral members’ and pitting them against larger members, which in the long run is likely to run against the interests we share with fellow EU members.
China denies it has such a strategy arguing, with considerable merit, that no matter what it does with its money vis-à-vis EU-related investments there will always be detractors. Moreover, as you can see in the insightful “Scramble For Europe” article http://www.ecfr.eu/page/-/ECFR37_Scramble_For_Europe_AW_v4.pdf (from the European Council of Foreign Relations), the EU already appears fractured over the approach individual members have taken with respect to their dealings with China, for whom addressing their current financial woes is the matter at hand: tomorrow and the long term cohesion of the EU can wait.
Accurate Ireland – China Products & Services Sourcing | Business Development Consultancy