Irish town that gave China the FTZ

Generations of Chinese leaders have visited Shannon and used its ideas to boost their nation's economy

Shannon, an Irish town with a population of about 10,000, seems like a magnet for Chinese leaders, with visits in the past two decades from two presidents and three premiers.

President Xi Jinping and former president Jiang Zemin, and Premier Li Keqiang and his predecessors Wen Jiabao and Zhu Rongji all have set foot in County Clare.  

Shannon is home to the world's first free trade zone, built in 1959. It is widely seen as an example of what international investment and smart local development can achieve, with businesses in the zone receiving tax incentives.

At the dawn of the reform and opening-up policy adopted by China in late 1978, reformist leader Deng Xiaoping considered how to create special economic zones in order to attract overseas investment. In 1980, Jiang Zemin, who was China's president from 1993 to 2003, was among a group of Chinese officials who embarked on a world tour to see how special economic zones worked elsewhere.

The visit was to be something of a revelation, with the delegation introduced to the world's first duty-free shop and a special zone based on low tax and free trade.

The Chinese government subsequently opened four special economic zones in 1980 based on the Shannon model. These became a major driving force for China's economy, allowing private investment to flow into the country and for a huge transfer of skills and technology to take place.

Shannon's close ties with China and the town's penchant for practical solutions to problems were further illustrated when Xi, then vice-president, led a delegation of about 150 Chinese business executives there in 2012.

During Xi's three-day visit, he attended a traditional banquet at Bunratty Castle, run by Shannon Heritage, the largest visitor attraction company in Ireland.

The banquet portrayed the lifestyle of medieval Ireland, particularly that of the nobility.

Two years ago, the medieval banquet celebrated its 50th anniversary, making it the longest continuously run evening entertainment in Europe, says John Ruddle, CEO of Shannon Heritage.

"The attractions were set up in the 1950s to 1960s, designed and developed at that time to promote traffic through Shannon Airport. When the attractions were being built originally, the problem was that people may come in for an hour or two or a morning, but there was nothing to keep them overnight. So the medieval banquet originated," Ruddle says.

He says the castle has received a considerable amount of businesses from Chinese companies' offices in Dublin ever since.

Shannon's links with China deepened further when Premier Li arrived in Shannon for a two-day visit to Ireland before his Latin America trip in May.

Patrick Edmond, Shannon group strategy director and managing director of the International Aviation Services Centre at Shannon Airport Authority, says the visits to Shannon from Chinese leaders are based on historical elements.

Chinese leaders' visits can be viewed as recognition of where some of the ideas used by China came from, according to Edmond.

"Perhaps, it is also the recognition of Ireland's geographic position and how it is potentially an interesting gateway," he adds.

But despite frequent high-level official visits from China, there are no direct flights from Ireland to China.

Edmond admits that the passenger numbers from China are relatively low but says they are looking for creative solutions.

"In recent years, trade between China and Brazil has grown steeply, so for China, it is a question of how to be able to make air cargoes more efficient. We see great potential for a service, for example, from China to Shannon and on to South America, because that can carry both passengers and cargo." Edmond says.

Shannon was the first airport in the world, outside of the Americas, to offer US preclearance facilities to passengers traveling to the United States. The service allows US-bound passengers to undertake all immigration and customs at Shannon prior to departure.

Shannon Airport has been thinking of applying similar solutions for cargo to speed up the process, Edmond says, adding that with trade flows increasing between China and Europe, it could be a possibility.

As an old Irish proverb goes, if you are not big and strong, you will have to be clever, he says.

wangmingjie@mail.chinadailyuk.com