China's new European trade hub: An Irish town of 18,000
The Irish town of Athlone has approved a project that could bring as many as 400 Chinese businesses to Ireland. With China facing declining growth and Ireland mired in debt, both stand to benefit.
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Ireland remains a hub for transnational brands. Google, Facebook, and Intel all run major European operations out of Ireland, lured by its 12.5 corporate tax. Amid a 14 percent national unemployment rate, roughly 13,000 new jobs were created in 2011 by foreign investors – a net gain of 6,000 jobs because 7,000 others were eliminated.Skip to next paragraph
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Driven by these big brands, Irish exports are on the up – a positive sign amid an otherwise harsh economic outlook. Enterprise Ireland, a state agency that promotes Irish investment overseas, said in December that 2011 export figures would “exceed the pre-recession record levels of 2008.”
However, exports are not putting a dent into Ireland's unemployment rate, which keeps consumer demand low and in turn hinders economic growth. Economist Brian Lucey says “part of the problem is Ireland's concentration on pharmaceutical, medical, and hi-tech sectors, which do not create many new jobs.”
Exemplifying this ambivalent economic outlook is Carraig Donn, a stylish but affordable fashion retailer headquartered in Westport, on Ireland's west coast near Croagh Patrick. Chairman Pat Hughes says that with revenue boosted by online sales, he hired an extra 60 people in 2011, bringing total staff up to 350. However, “times are challenging, and we cannot really plan too far ahead," he says.
According to statistics compiled by Vision-Net, 160 irish companies collapsed each month in 2011, a 20 percent increase from the previous year, highlighting the depth of Ireland's economic woes.
Strategy: Attract foreign investment
The Irish Exporters Association reports 75 percent of Irish exports come from foreign investors, rather than homegrown successes such as Carraig Donn. With that in mind, the government job strategy remains based on attracting more foreign investment and expanding export industries that can employ citizens, said a spokesman for Minister for Finance Michael Noonan in an e-mail. Editor's note: Due to an editing error, this paragraph previously misidentified Michael Noonan. It has now been corrected.
Investments like the Althone trade hub – dubbed Chinatown by one local paper – might help. Though three anonymous objections to the project have since been lodged with the Irish planning board, Athlone residents generally seem to be in favor.
Some locals think so. Speaking in a busy Athlone shopping mall during post-Christmas sales, teacher Kevin Jordan says, “We don't know a whole lot about the project, but it could mean a lot of jobs for this region, and that has to be welcomed.”
Athlone Mayor Alan Shaw said town residents are pleased that the county council approved the project. He said he believes that one reason the Chinese backers chose Ireland for such a huge investment is that unlike other European countries, "Ireland has not been preaching to the Chinese about human rights."
Mr. Hughes of Carraig Donn is already looking to the vast potential middle-class markets in China and India and had an office in Guangzhou, China. Should he be able to grow his business there, it could create more demand for jobs at home.
"I see India and particularly China as markets we can access, with their growing and vast middle classes, and we hope to get potential customers there aware of our product," he says.
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