China Power

Ireland and China: Trading Values

Will Ireland’s flimsy new government be able to maintain growing bonds with China?

Ireland and China: Trading Values
Credit: China Ireland flag images via

The Economist recently joined an illustrious group of publications, including the Wall Street Journal, Huffington Post, and South China Morning Post, who have all illustrated a story on soccer in China with a picture of Xi Jinping kicking a soccer ball in Dublin. Only it’s not a soccer ball — in Dublin Xi Jinping was trying his hand at Gaelic football, a different sport altogether indigenous to Ireland. It says a lot about China’s curiously close relationship with Ireland that it’s easier to find a picture of China’s leader playing a sport almost unknown outside of Ireland than to find one of Xi playing the beautiful game itself.

Ireland’s Taoiseach (Prime Minister) Enda Kenny has just been returned to office, albeit with a flimsy minority government, two months after inconclusive elections. In his last term Kenny’s government enjoyed a profitable relationship with China. Ireland became the first EU country permitted to export beef to China since the mad cow disease crisis. Irish exports to China, particularly food and dairy, have become extremely valuable to Ireland’s economy — trade has almost doubled to 8 billion euros ($9 billion) during Kenny’s tenure. China will become Ireland’s fourth biggest export market by 2030. A plethora of Irish state agencies are promoting “Brand Ireland” in China, and assisting Irish companies to expand into the Middle Kingdom. Kenny and President Michael D. Higgins have both made high profile visits to China, while Chinese President Xi Jinping and Premier Li Keqiang have both been to Ireland.

Irish culture is also growing in China. Riverdance regularly tours to huge sold out arenas, 1990s Irish boybands are KTV favorites, the works of Irish literary greats such as Joyce and Beckett are widely available in translation, and Irish bars are proliferating in the bigger cities. 40,000 Chinese tourists visit Ireland a year, and Ireland’s tourism authorities want to increase this to 50,000.

Beijing also sees a lot of value in its relationship with Dublin, and Chinese policymakers have followed the rise, fall, and recovery of the Celtic Tiger economy with interest. Ireland presents a model of an underdeveloped agrarian society that rapidly and successfully opened up to investment and achieved stunning levels of growth. It also presents a model of an overheated economy ruined by a property bubble that is now recovering impressively. On a 2005 visit, Wen Jiabao made time to visit Shannon, a pilgrimage of sorts to one of the world’s earliest Special Economic Zones. Jiang Zemin spent three weeks training in Shannon in 1980, the same year Shenzhen’s SEZ was established.

As for trade, importing Irish food can help China achieve food security. Beijing enjoys dealing with Kenny, who has always seemed more comfortable on the global stage than at home. His catchphrase, “Ireland is the best small country in the world in which to do business,” is not just a sales pitch. He has bent over backwards to attract investment and encourage trade.

Clouds on the horizon

But there have been a couple of rare negative headlines in the Irish press lately about Irish-Chinese relations. Irish animal rights groups have been kicking up a fuss about the export of Irish greyhounds to a controversial track in Macau. In the past Irish authorities have blocked the export of Irish greyhounds to China under animal welfare legislation, but prices for Irish greyhounds are rising after Qantas stopped carrying greyhounds from Australia to Asia. Local animal rights groups have called for a blanket ban on greyhound exports to China, but this isn’t likely. How Ireland deals with this conflict between an opportunity for trade and contrasting standards on animal rights will offer clues on its approach to China more generally. Animal rights is one thing, but Ireland’s stance on human rights in China has the potential to derail the two countries’ burgeoning relationship entirely.

Li Keqiang’s letter of congratulations to Kenny on his reelection has not gained much media attention in Ireland. However, an email from mid-ranking officials to Ireland’s agriculture ministry has generated more headlines. Exactly what the email said has not been revealed, but Irish officials are now worried that a recent vote at the UN Human Rights Council, where Ireland voted in favor of a U.S. motion highlighting problems with China’s human rights record, might endanger the much vaunted beef deal. The beef deal, the result of years of targeted diplomacy from Ireland, could be worth 100 million euros to Ireland in the short term alone. It’s also a rare positive prospect for a beleaguered Irish government, as the opportunities to export to China could bring a lot of wealth to Ireland’s farmers, a group that can and does make and break governments. To protect the deal, Ireland’s ultra-liberal president already swallowed his misgivings on human rights and brown-nosed China’s leaders during his state visit.

If Enda Kenny’s new government will survive, it will need the support of rural Ireland, a clientalist demographic that expects its politicians to fight against changes imposed from Dublin or Brussels that threaten their income and way of life — bans on chemicals used by farmers, new wind turbines, bans on turf cutting, and pressure to cut agricultural emissions are all election issues in rural Ireland. Kenny’s party colleagues will not relish the prospect of telling their constituents that the long-promised beef exports to China will now not appear because of jailed journalists in a distant land.

Kenny will also need economic growth to maintain his leadership. Although Ireland’s recovery from recession has been impressive, ordinary people are still hurting from years of public austerity. The fiscal benefits of increasing exports to China will not be rebuffed lightly.

Ireland’s relationship with the United States gives us a clue about how successive Irish governments have tiptoed around superpowers. The U.S. military regularly stops at Ireland’s Shannon Airport coming to and from war-zones in the Middle East. Critics argue that this is a violation of Ireland’s policy of neutrality in all military conflicts. Human rights groups claim that some of these military flights are carrying torture victims en route to Guantanamo Bay, making Ireland complicit in human rights abuses. The Irish government has chosen to ignore all of this, and in fact actively prevents closer scrutiny of U.S. military use of Shannon airport. Millions of euros are spent on security, and two high profile politicians, Mick Wallace and Clare Daly, were arrested and charged for an attempted inspection. The United States is simply too important and valuable an ally for Ireland to risk antagonizing. Despite public concern about the effects the Trans-Atlantic Trade and Investment Partnership (TTIP), a trade deal between the U.S. and the EU, would have on consumer and environmental standards in Ireland, Kenny has rabidly supported the deal.

If this is any indication of Dublin’s China policy, Ireland will continue its rhetorical support for human rights when it comes to UN motions, but don’t expect any serious confrontation any time soon. Ireland, despite its own history of colonization, does not recognize Taiwan and does not speak out on Tibet.

Domestic uncertainty

Perhaps the biggest change in Ireland’s approach to China will be caused by domestic factors. Ireland’s political landscape, historically dominated by the big two civil war parties, Fine Gael and Fianna Fail, is diversifying. Kenny’s Fine Gael party are in government only thanks to the support of a handful of non-party politicians and Fianna Fail’s abstention on budget votes. Fianna Fail could collapse the government and force an election as soon as they think they could win one. Alternatively Ireland’s fringe parties could continue growing and, with enough political will, present a rainbow coalition alternative to the traditional big two. Fianna Fail and Fine Gael, both center-right and pro-business, are unlikely to alter radically on trade with China. But a left-leaning rainbow coalition might reassess Ireland’s entire open-economy model.

Beijing has enjoyed dealing with Ireland’s extraordinarily pro-trade government — it may not be so generous if a new government makes trading more difficult, or is more confrontational on China’s human rights record. In any case the expected short lifespan of the current government will hinder the well-planned and well-delivered strategic diplomacy that has enabled Kenny’s success in China so far.

Whatever happens, Ireland will never be too far from Xi Jinping’s mind. A New Year’s speech broadcast from his office in 2014 revealed that he keeps the oft-misidentified photo from Croke Park on his wall. As Ireland is drawn deeper and deeper into trade with China, it might begin to realize, just like the embarrassed journalists who identified Gaelic Football as soccer, that this is a different game with different rules.

Darren Kelly is a trainee at the European Parliament, and has a MA degree in History of International Relations from University College Dublin.