Does Chinese investment benefit or damage Ireland?

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

Does ******** investment benefit or damage Ireland?

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==Huawei

Back in May, Irish Minister Dara Calleary helped Huawei celebrate 20 years of doing business in the country

The Irish economy has been increasingly attracting ******** investment, but does it come with a reputational cost?

In 2020, 25 ******** companies had operations in the Republic of Ireland. By this year the number had

This is the hidden content, please

• Sign In
• or
• Sign Up

For some this new flood of yuan into the country offers Ireland an opportunity to reduce its reliance on being the ********* base for US tech giants such as Apple and Alphabet. And it creates additional jobs.

But for an increasing number of critics, Ireland being home to ******** firms links the country to the human rights ****** allegations levelled against some such companies. These include ******** clothing firm Shein, which since May 2023 has had its ********* headquarters in Dublin.

Shein has long been attacked for how the workers who makes its clothes are treated. And earlier this year it had to admit that it

This is the hidden content, please

• Sign In
• or
• Sign Up

in its supply chain.

The Irish government is also in the diplomatically awkward position of luring many of the very ******** companies that the US has sanctioned.

Two cases in point – telecoms firm Huawei and drugs company WuXi Biologics.

In May, Ireland’s Minister of State for Trade Promotion, Dara Calleary,

This is the hidden content, please

• Sign In
• or
• Sign Up

celebrating how Huawei was contributing €800m ($889m; £668m) per year to the Irish economy. The firm has three research and development centres in Ireland.

This is the same Huawei whose telecoms network equipment the US has banned since 2022 due to concerns over

This is the hidden content, please

• Sign In
• or
• Sign Up

The *** has moved in the same direction, ordering phone networks to remove Huawei components. And mobile phone networks in many Western nations, including Ireland, no longer offer Huawei handsets.

Meanwhile, WuXi has, since 2018, invested more than €1bn in a facility in Dundalk, near the border with Northern Ireland.

Earlier this month the US House of Representatives

This is the hidden content, please

• Sign In
• or
• Sign Up

to restrict US firms’ ability to work with WuXi, again citing national security concerns. The bill now has to go to the US Senate.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==WuXi

WuXi has a big facility in Dundalk, near the border with Northern Ireland

Ireland’s Industrial Development Authority is the government agency whose mandate is to attract foreign investment into the country. It has three offices in China, and says it seeks “to promote Ireland as a gateway to Europe for ******** investors”.

Another ******** firm that has its ********* headquarters in Ireland is social media video app TikTok, which is owned by Beijing-based parent firm ByteDance. And the parent of ******** online retailer Temu

This is the hidden content, please

• Sign In
• or
• Sign Up

from China to Ireland last year.

Prominent critics of Ireland rolling out a “green carpet” to Chinse firms include Barry Andrews, one of Ireland’s members of the ********* Parliament. “Human rights and environmental abuses should not be allowed in Irish shopping baskets,” says the Fianna Fáil MEP.

He points to a US Congress report from last year, which said there was “an extremely high risk that Temu’s supply chains are

This is the hidden content, please

• Sign In
• or
• Sign Up

Temu had told the investigation that it had a

This is the hidden content, please

• Sign In
• or
• Sign Up

towards the practice.

“One person’s bargain is another’s back-breaking work for ******** wages,” adds Mr Andrews, whose party is part of the current Irish government coalition.

Critics also argue that there are substantial differences between US tech firms operating in Ireland and ******** ones – for example, about openness.

For instance, Huawei and WuXi declined an opportunity to be interviewed for this article. Shein provided a spokesperson who was only prepared to speak off the record, then did not reply to follow-up questions.

Some leading economists question whether Ireland even needs the few thousand jobs that the ******** firms provide.

“Ireland’s economy has been running at near full employment for the best part of a decade,” says Dan O’Brien, chief economist at Ireland’s Institute of International and ********* Affairs.

Irish unemployment was 4.3% in August 2024, only slightly above its all-time low of 3.90% in October 2020. Economists generally consider an unemployment rate of around 4 to 5% to

This is the hidden content, please

• Sign In
• or
• Sign Up

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==Getty Images

Huawei has a big presence in Ireland but the main Irish phone networks no longer offer its handsets

Mr O’Brien also points to the fact that a fifth of Ireland’s private-sector employment is directly, or indirectly, attributable to foreign direct investment (FDI), according to

This is the hidden content, please

• Sign In
• or
• Sign Up

He says this is too high.

It is so elevated because Ireland has one of the lowest standard corporation tax rates in Europe, at 12.5%. This is the tax that all but the very biggest firms have to pay on their profits. By comparison, the *** rate is 25%.

Mr O’Brien says that Ireland’s level of FDI was already too high without the ******** investment on top. “Given we are already overly dependent on FDI in a world that is at risk of deglobalisation, we don’t need another major source of FDI on top of that from the ******* States.”

He adds EU rules should be “actively used to discourage ******** FDI” in Ireland.

The Irish government tells the BBC that it “supports the common EU approach to China on de-risking… [but] the government has been clear that de-risking is not decoupling”.

Irish Minister for Enterprise, Trade and Employment, Peter Burke adds: “In an era of continuous global uncertainty, Ireland offers a stable and pro-business environment. Multinational companies, including ******** companies, recognise these opportunities.”

Given how much Ireland’s economy does depend on FDI, some economists say ******** investment in Ireland can be seen as a welcome insurance policy in case some US firms pull out.

“There is a huge pressure on US tech companies to re-domicile and re-invest in the US,” says Constantin Gurdgiev, an economist at Trinity College Dublin and the University of Northern Colorado.

Meanwhile, other ********* countries, such as Poland, Estonia, Slovakia, and Malta, have made inroads in courting US investments, presenting Ireland with new competition from countries with cheaper housing and less rain.

Dr Gurdgiev also points to “the forever-looming threat of global corporate tax reforms”, further eroding Ireland’s low corporation tax. The country has already signed up to Organisation for Economic Co-operation and Development rules, and as a result,

This is the hidden content, please

• Sign In
• or
• Sign Up

a 15% corporation tax rate for firms with an annual turnover of more than €750m ($835m; £625m).

And earlier this month, the ********* Court of Justice ruled that Apple had to pay Ireland

This is the hidden content, please

• Sign In
• or
• Sign Up

It followed after the ********* Commission accused Ireland of giving Apple ******** tax advantages.

Dublin consistently argued against the need for the tax to be paid, but said it would

This is the hidden content, please

• Sign In
• or
• Sign Up

Dr Gurdgiev adds that Ireland is acting “with some strategic foresight” in courting Beijing. And that even if Dublin is welcoming the likes of Huawei, he says that the strength and influence of the Irish diaspora in the US means that Washington will turn something of a ****** eye.

He argues that this is why the US authorities have been “largely laissez-faire in their approach to chasing tax optimization schemes that Dublin has been developing over decades”.

Plus, he says Ireland provides the US, EU and China with a useful “neutral ground” where both US and ******** tech firms can operate.

Dr Gurdgiev adds that by putting itself in such a position, Ireland is playing a “dangerous geopolitical game” for a small economy.

However, he says its diplomatic closeness to the US should make its position “relatively safe”.

Read more global business and tech stories

This is the hidden content, please

• Sign In
• or
• Sign Up

#******** #investment #benefit #damage #Ireland

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up