Ireland a catalyst for improved China-EU ties

The China-EU trade negotiations may provide the Republic of Ireland with an opportunity to play an important supporting role in promoting harmonious dialogue, which is needed to pave the way toward a satisfactory conclusion. There are many obstacles that need to be overcome and conflicts to be avoided, and that can happen only through open dialogue, hard negotiations and mutual respect.

The resignation of Irish politician Phil Hogan as European trade commissioner for trade last month has not delayed matters unduly. Valdis Dombrovskis, former executive vice-president of EC and Latvian prime minister has been given responsibility for the portfolio. He is a very highly regarded and experienced replacement and control of the portfolio remains with the European People's Party.

This is disappointing from an Irish perspective as the EU commissioner for trade is a coveted and high-profile post which covers policy as well as the management of the EU's internal and external trading partners. It has acquired added significance in light of the ongoing international trade discussions and Brexit.

Mairead McGuiness was chosen as Ireland's new Commissioner responsible for financial services, stability and capital markets. The is also a very important portfolio and McGuiness is a highly respected veteran of the European Parliament.

The EU-China leaders' meeting on Monday and the high-level trade and economic dialogue at the end of July, both via video link, were not ideal forums for complex negotiations as sentiments are more difficult to gauge in the absence of personal interaction. And despite both sides acknowledging that strong progress has been made, they agreed much work still needs to be done, particularly in key areas of trade and investment, to take the China-EU partnership forward.

It is in this context that Ireland may have a role to play behind the scenes. It has an exceptional relationship with and plays a prominent role within the EU, and it has forged very strong relations and trust with China as a result of economic and cultural ties developed over the past more than 40 years.

Ireland joined the European Community (predecessor to the EU) in 1973 alongside the United Kingdom and Denmark but has always played a more influential role in the bloc than its size would suggest. A little bigger in area than Harbin, Heilongjiang province, and with half its population, Ireland has played a significant role in shaping the EU thanks to key Irish figures including academics, business leaders and politicians.

Diplomatic relations were established between China and Ireland in 1979. Since then Ireland has set up a consulate general in Shanghai followed by another in the Hong Kong Special Administrative Region with supporting trade representation in both locations.

China-Ireland relations developed strong momentum in 1998 with the visit of Bertie Ahern, then Irish prime minister, to Beijing, Shanghai and Hong Kong, leading a high-level trade delegation comprising 26 companies. A number of significant trade deals, and educational and cultural exchange programs resulted from that visit, with the Irish government unveiling in 1999 its Asia Strategy with China at the heart of its political, economic and cultural engagement plan. Bilateral relations have grown from strength to strength since then.

The signing of the Sino-Irish strategic partnership agreement in 2012 led to deeper cooperation, particularly for small and medium-sized businesses, and encouraged increasing foreign direct investment (FDI) in sectors such as science and technology, health, agriculture, and information and communications technology, along with financial services in which Irish companies have earned a global recognition. In 2012, a visit to Ireland by Xi Jinping, then vice-president, propelled the relationship to new heights, and there have been numerous high-level exchanges ever since.

Chinese FDI in Ireland reached an all-time high last year and was forecast to increase by more than 50 percent in contrast to contractions in most other countries. Despite the current global economic turmoil, escalating trade tensions and the devastation caused by the COVID-19 pandemic, projected levels of FDI in Ireland remain strong due to a solid pipeline of existing deals. Some may be progressing at a slower pace than anticipated, or be temporarily on hold, but the level of commitment from Chinese companies bodes well for the Irish economy.

Undoubtedly, the most important factor underpinning this sustained commitment is the strength of the bilateral relationship across all levels of businesses and governments.

Of course, Ireland's membership of the EU, proactive government policies, along with attractive rates of taxation, access to international markets and a well-educated workforce are all factors that contribute to the country's attractiveness. The endorsement of some of the world's leading companies that have chosen Ireland as their preferred location has also contributed to the country's attractiveness, as has the blossoming and integration of Chinese communities across the country over the past few decades.

The current lord mayor of Dublin, Hazel Chu, is the first ethnic Chinese to hold political office in Ireland and the first to be mayor of a major European capital.

The online meeting between EU leaders and President Xi Jinping on Monday once again highlighted the importance of direct dialogue and interpersonal exchanges in defining commercial policy. Dublin will continue to help expand not only Ireland-China relations but also EU-China relations and continue the important work already underway and further strengthen existing relationships.

The author, currently based in Hong Kong, is chairman of the Multitude Foundation.