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IDA Ireland Presents. Attracting Chinese FDI into Ireland Eileen Sharpe Head of Strategic Development China 3 rd September 2013. Agenda. IDA Ireland China scale & perspective China investment trends China fundamental differences & underlying investment drivers

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IDA Ireland Presents

Attracting Chinese FDI into Ireland

Eileen Sharpe

Head of Strategic Development China

3rd September 2013

  • IDA Ireland
  • China scale & perspective
  • China investment trends
  • China fundamental differences & underlying investment drivers
  • China challenges & opportunities
ida ireland role structure
IDA Ireland Role & Structure
  • Attracts Foreign Direct Investment (FDI) into Ireland
  • Supports existing clients to develop additional business activities within Ireland
  • Builds relationships and makes connections for client companies within Ireland
  • Assists companies with their entry visaand work permit issues
  • Provides incentives to companies in certain areas and locations
ida ireland strategy focus 2020
IDA Ireland Strategy Focus 2020

Sector Focus

Activity Focus

Global Business Services

High Value Manufacturing

Research, Development & Innovation


Why Ireland


Tax regime


Talent Pool


Track Record

Pro-business Environment

large talent pool
Large Talent Pool
      • Internationalized culture
      • Youngest workforce in Europe, with 34% under 25 years of age
      • Excellent skills and knowledge base with reputation for worker flexibility
  • IMD World Competitiveness Yearbook 2011
    • 1st for the availability of skilled labour
    • One of the best education systems in the world for Higher Education achievement (ranks 9th)

Good Track Record

  • 8 of the top 10 in ICT
  • 9 of the top 10 in Pharmaceuticals
  • 17 of the top 25 in Medical Devices
  • More than 50% of the world’s leading Financial Services firms
  • 10 top “Born on the Internet” companies
favourable tax regime
Favourable Tax Regime
  • Current rate of 12.5% amongst the lowest in the EU
  • Research and development tax incentives (25% Tax Credit)
  • Ireland’s extensive double taxation treaty network with treaties with 69 countries, of which 59 are currently in force, and negotiations for new treaties are on-going with a further 18 countries.
  • Ireland has signed an excellent double taxation treaty with China
    • Withholding Tax 0%
    • Capital Gains Tax 0%
pro business environment
Pro-business Environment
  • Ireland is a member of the EU and also of the OECD
  • Only English speaking member of the Euro-zone
  • Efficient and responsive pro-business government
  • Advanced telecommunications infrastructure
  • Common law jurisdiction
  • IMD World Competiveness Yearbook 2011 - 1st for business legislation for foreign investors

China – Perspective & Scale

  • World’s 3rd largest country
  • World’s largest population 1.4 billion
  • Beijing (2013)
  • Centre of Government and political power
  • 2nd largest city
  • HQs of main banks and financial institutions
  • Home of State-Owned Enterprises







  • Shanghai (2006)
  • Largest city by population
  • Massive inward FDI flow
  • Major transport hub












  • Shenzhen (2010)
  • Designated Government high tech center
  • China’s most successful economic zone
  • Home to PRCs top high tech companies



Hong Kong

china scale diversity of market
China – Scale & Diversity of Market
  • World’s largest population - over 1.4 billion people & world’s third largest country
  • Urbanisation– 8 cities with population of 10 million, 93 cities with population of 5 million, 263 cities with population of over 1 million
  • Growing middle class forecasted to expand to 700 million by 2020
  • Diversity – Culture. Though Hans make up 91% of the population there are 56 officially recognised ethnic groups, 44 of which occupy autonomous regions
  • Diversity – Gender Imbalance. Today in China 119 boys exist for every 100 girls; in some regions the ratio is 130 boys to 100 girls
china economic growth
China – Economic Growth

Shanghai in 1992

  • World’s second largest economy
  • GDP growth rate of 11.6% in 2011, falling to 9.7% in 2012
  • Slowing in 2013 with 7.5% for the 2nd quarter. Though this represents the slowest expansion since 2009, it remains significantly higher than western economies
  • All indicators suggest growth of 7% plus will be sustained in the medium term because of continued urbanisation, educational and infrastructure investment
  • Distributed economic growth – less developed regions such as Sichuan, Inner Mongolia and Chongqing are growing at rates of between 10% and 15% annually
  • Largest merchandise exporter in the world @ $1.58 trillion, 50% to Asia
  • Second largest importer of goods ($1.4 trillion)
  • World’s 3rd largest recipient of FDI ($100 billion) with ODI growing substantially

Shanghai in 2013

china government policy
China – Government Policy
  • Aggressive global expansion policy being pursued by Chinese Government called the Go-out-Strategy: 18,000 Chinese enterprises now overseas (investment: US$424.8 billion)
  • Centralised decision-making on economic issues with strong Government influence on all large scale overseas investment
  • This influence extends to company level. All SOEs have an operational CEO who reports into a designated Communist Party of China official, based in the company. Two parallel structures exist – political and business
  • Impact of Xi Jinping’s visit to Ireland in 2012 cannot be overstated as it positions Ireland positively with senior party officials in the new 10 year Government
china outward fdi trends
China – Outward FDI Trends

All units in USD Billions


Chinese Direct Investment in EU-27

( 2000 – 2011)

All units in USD Million

china fundamental differences
China – Fundamental Differences





Weekend Activities

Attitude to Punctuality





chinese investment underlying drivers
Chinese Investment - Underlying Drivers

Track Record


Brand acquisition

Natural Resources

Chinese Diaspora

Sales Networks

Familiarity & ease of doing business

china recognising the challenges
China – Recognising the Challenges

Challenges to FDI business delivery

Peripherality / no direct access

Schengen visa constraints

Scale and diversity of market.

Culture / Language

Low base of awareness

Pattern of FDI – Market based and/or M&A

Relative cost base

Asian/domestic market focus for some sectors

Long conversion cycles and relationship building

  • Macroeconomic Risks
  • Social
  • Risk of social unrest due to urbanisation, inequality & gender imbalance
  • Political
  • Transition from traditional Communist Party rule to market socialism
  • Financial
  • Largely unknown – any significant credit tightening will put the brakes on FDI flow
ida s presence in china and sector focus
IDA’s Presence in China and Sector Focus
  • Shanghai (2006)
  • Shenzhen (2010)
  • Beijing (2013)

IDA Office in China

Sector Focus

  • Information Communication Technology
  • International Financial Services
  • Life Science
  • Clean Tech
  • State Assets and M&A

Chinese Companies in Ireland


high level strategy for china
High Level Strategy for China

Win High Quality Investments and promote job creation concentrating on sectors with highest potential for delivery

Build a reputation for Ireland as leading location for Chinese MNCs particularly in Financial and ICT sectors

Expand Government to Government partnership at all levels

Pursue Collaborative and Innovative Approaches to the Business, both internally and externally, including game changing national initiative

Build resource capability in China and Ireland to ensure operational effectiveness

Undertake High Visibility Marketing & Communications / Reputation Enhancing

ireland china value proposition
Ireland / China Value Proposition


Target Activities

Value Propositions

State assets for sale or development

Financial Services

Aircraft & Asset Leasing, Mid office functions to support EU expansion, Regional HQ / operations, Project Financing, Payments / Remittances, Funds & Insurance

Excellent China Ireland relations

Familiarity / ease of doing business / language

ICT including Digital Media

EU Membership /Status market access

M&A, Partnerships, Regional Manufacturing – final assembly, R&D, Regional HQ & Sales, Customer / Tech Support, Localisation.

Track Record / Client base

State Owned Enterprises / Conglomerates, Engineering LS players

Tax Regime, DTA

Key Tech Expertise

Special Projects

Sino Irish technology funding

Strategic Acquisition, Infrastructure Projects

Legal System

Holding co regime

Government Access / State Interest in Chinese investment



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