IDA Ireland Presents Attracting Chinese FDI into Ireland Eileen Sharpe Head of Strategic Development...
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Transcript of IDA Ireland Presents Attracting Chinese FDI into Ireland Eileen Sharpe Head of Strategic Development...
IDA Ireland PresentsIDA Ireland Presents
Attracting Chinese FDI into Ireland
Eileen SharpeHead of Strategic Development China
3rd September 2013
Agenda
IDA Ireland
China scale & perspective
China investment trends
China fundamental differences & underlying investment drivers
China challenges & opportunities
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 visa and work permit issues
Provides incentives to companies in certain areas and locations
IDA Ireland Strategy Focus 2020
Sector Focus Activity Focus
Why Ireland
Favourable Favourable Tax regime Tax regime
GoodGoodTrack Record Track Record
Large Large Talent Pool Talent Pool
Pro-business Pro-business Environment Environment
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
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
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
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
China – Perspective & Scale
CHINA•World’s 3rd largest country•World’s largest population 1.4 billion
Shanghai
Shenzhen
BeijingBaoding
Tianjin
Chongqing
Chengdu
Guangzhou
Harbin
Suzhou
Nanyang
Shijiazhuang
Linyi
Wuxi
Wuhan
Nanjing
Hong Kong
Hangzhou
Shenyang
Changsha
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
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 1992
Shanghai in 2013
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 – FDI Flows Relative to Global
Chinese Direct Investment in EU-27 (2000 – 2011)
Chinese Direct Investment in EU-27 ( 2000 – 2011)
China – Fundamental Differences
Dining Lifestyle Transportation
Ego Weekend Activities Attitude to Punctuality
Socialising Behaviours Leadership
Queuing
Chinese Investment - Underlying Drivers
Track RecordNatural Resources
Sales NetworksChinese Diaspora
TechnologyBrand acquisition
Familiarity & ease of doing business
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
SocialRisk of social unrest due to urbanisation, inequality & gender imbalance
PoliticalTransition from traditional Communist Party rule to market socialism
FinancialLargely unknown – any significant credit tightening will put the brakes on FDI flow
IDA’s Presence in China and Sector Focus
• Shanghai (2006)
• Shenzhen (2010)
• Beijing (2013)
IDA Office in China
• Information Communication Technology
• International Financial Services
• Life Science
• Clean Tech
• State Assets and M&A
Sector Focus
Chinese Companies in Ireland在爱尔兰的中国企业
High Level Strategy for China
1. Win High Quality Investments and promote job creation concentrating on sectors with highest potential for delivery
2. Build a reputation for Ireland as leading location for Chinese MNCs particularly in Financial and ICT sectors
3. Expand Government to Government partnership at all levels
4. Pursue Collaborative and Innovative Approaches to the Business, both internally and externally, including game changing national initiative
5. Build resource capability in China and Ireland to ensure operational effectiveness
6. Undertake High Visibility Marketing & Communications / Reputation Enhancing
Ireland / China Value Proposition
Focus
Financial Services
Target Activities
Aircraft & Asset Leasing, Mid office functions to support EU
expansion, Regional HQ / operations, Project Financing,
Payments / Remittances, Funds & Insurance
Strategic Acquisition, Infrastructure Projects
Value PropositionsState assets for sale or
development
Excellent China Ireland relations
Familiarity / ease of doing business / language
EU Membership /Status market access
Track Record / Client base
Tax Regime, DTA
Key Tech Expertise
Sino Irish technology funding
Legal System
Holding co regime
Government Access / State Interest in Chinese investment
Special Projects
ICT including Digital Media
State Owned Enterprises / Conglomerates,
Engineering LS players
M&A, Partnerships, Regional Manufacturing –
final assembly, R&D, Regional HQ & Sales,
Customer / Tech Support, Localisation.
Ireland – Bridge, links China to the World
THANK YOU
For more information please see our website
www.idaireland.ie
Or Contact
Telephone: +353 (0)1 603 4000