Address by Mr. Billy Kelleher, T.D., Ireland’s Minister for International Trade, at the 10^th Western China International Economy and Trade Fair, Sichuan Province, Chengdu.

Introduction

Distinguished guests, ladies and gentlemen. It is indeed a pleasure for me to be here at this, the Ministerial Forum of the 10^th Western China International Economy and Trade Fair.

I am particularly glad to be here on such an auspicious occasion, as China celebrates sixty years of the formation of the People’s Republic. Your celebrations earlier this month were a reminder of the enormous progress China has achieved over the last six decades

Let me say how pleased I am to visit Chengdu, the commercial hub of Southwest China, representing the Irish Government. This area is already home to over 130 of the Fortune 500 companies, including many, like Intel and Microsoft, which also have large investments in Ireland. I appreciate having the opportunity of seeing at first hand the enormous progress Sichuan has made in its recovery from the devastation of last year’s earthquake.

The response of the Government and people of Ireland to the relief efforts, and the outpouring of sympathy for the terrible suffering of the local people affected by the earthquake, are evidence of the strength of our bilateral relations.

Ireland and China

2009 marks 30 years of positive and warm diplomatic relations between our two countries. Both countries have undergone enormous economic and social changes. China has achieved unparalleled success in integrating itself into the world economy.

In the same period, Ireland’s outward looking policies as a small state, our membership of the European Union, and our constant focus on education, enterprise and innovation have shaped our development, enabling us to transform ourselves from an underdeveloped, agrarian society into a high technology and knowledge economy, with a keen emphasis on innovation and enterprise.

Education

China and Ireland share some important characteristics. Both countries have embraced an export-led growth model, and have historically stressed the vital role that education and learning plays in building a skilled workforce for future economic growth. Young people in Ireland now have one of the highest educational attainments in the OECD; some forty per cent of our twenty-five to thirty-four year olds have a third level education. Especially noteworthy is the cooperation in education and the many agreements in place between the Irish colleges and their Chinese partners.

Indeed, our education service providers are well represented here in Chengdu today with five of our leading universities and colleges accompanying me on this trade mission. Education is one of the most important linkages between Ireland and China.

Asia Strategy

The Irish Government’s Asia Strategy, launched ten years ago, placed China at the core of Ireland’s economic relationship with Asia. There has been a rapid and continuing acceleration of trade between our two countries. China is now by far Ireland’s largest trading partner in Asia and the trade volume has reached €6.6 billion a year, with merchandise exports growing to €2.3 billion in 2008.

Today more than 90 Irish companies have operations established in China – up from fewer than 50 just over three years ago – and more Irish companies are being established in China every month, many with the help and support of Enterprise Ireland, the Irish Government’s state agency with responsibility for developing the export potential of Irish companies.

This agency now has four China offices in Beijing, Shanghai, Guangzhouand Hong Kong. I am confident that progress to date represents only a fraction of the potential for Irish enterprises in China and we look forward to building on this.

For China, as part of your “Look Out” Policy, Ireland is an excellent location for your companies, as we are members of the Eurozone and the Gateway to Europe for overseas investors.

Global Crisis and Recovery

The global economy is currently overcoming its deepest and most widespread slowdown in decades. Global trade has fallen dramatically in 2009, and manufacturing output in many economies is contracted by double-digit rates.

It is now obvious that no country is immune from the huge challenges such as the current financial and economic crisis, climate change, energy security and the devastating impact of poverty and hunger. I congratulate China on the scale and success of its stimulus package.

Ireland’s Economic Development

Despite the current turndown, compared with our economic position just twenty years ago, employment and living standards have improved dramatically.

As a small open economy, Ireland has not been immune to the global economic crisis.

The Irish Government took decisive steps to support the banking sector, including a bank guarantee, recapitalisation of some banks, and, in a solitary case, bank nationalisation. We are in the process of establishing a National Assets Management Agency to ensure banks continue responsible lending and provide funding for continued growth.

Our export performance has been resilient, particularly in the Life Sciences and Education Services and other high tech sectors, enjoying modest overall export growth that contrasts with the double-digit export declines of some of our trading partners.

Due to the especially open nature of the Irish economy, we, like China, aim to benefit substantially from a global economic recovery. We also support the very significant initiatives taken at European level to stimulate growth through the European Economic Recovery Plan and to stabilise the financial markets.

Ireland’s prospects over the medium-term are favourable. We have a young highly educated population, flexible markets, infrastructural investment programme, pro-business environment, low tax burden and the outward orientation of the economy. As an anticipated modest global recovery takes root in 2010, the Irish economy is expected to return to growth in 2011.

The Smart Economy

Ireland is preparing for recovery by reorienting our economy to ensure a resumption of sustainable growth as soon as possible. For that reason, the Irish Government published a blueprint last December to build Ireland’s Smart Economy. This blueprint involves five key areas for action:

• Securing the enterprise economy and promoting competitiveness;

• Building the ideas economy by establishing Ireland as an innovation and technology hub;

• Enhancing the environment, securing energy supplies and building the GreenTech sector;

• Investing in critical public infrastructure;

• Ensuring more efficient and effective public services and smarter regulation.

The lesson from severe global recessions in the past is that weathering the economic storm is not sufficient; countries need to restructure their economies to target the next wave of economic growth. A key part of Ireland’s vision for a Smart Economy is the need to effectively utilise the knowledge, skills and creativity of people and translates them into innovative processes, products and sustainable jobs. Opportunities from development of the green enterprise are central to our vision, recognising the need to move to a low-carbon economy.

Creating Ireland’s Smart Economy will nourish a high-value, research-intensive, multinational community alongside a thriving set of Irish innovative companies. Ireland is one of the most entrepreneurial economies in Europe - as many as 2,800 people are setting up new businesses every month – a per capita rate significantly higher than that of the EU and the OECD.

We are investing billions in research and are focused on getting maximum return for this investment by intensifying our efforts towards creating the best research, innovation and commercialisation ecosystem in Europe, - marketed internationally as “The Innovation Island”. Ireland is, and will continue to be, a high tech economy and a natural partner for companies here in China.

Conclusion

Distinguished guests, ladies and gentlemen

Ireland and China and indeed the rest of the international community are working to identify common strategies to address the current world economic and financial situation, climate change and energy security. They are truly global challenges that require a coherent global response.

I am very happy to have had the opportunity to share with you today how Ireland is responding to meet the challenges and opportunities of today’s world economy.

Thank you

ENDS/TC397