Brexit uncertainty? It's the luck of the Irish

When Eoghan Murphy entered the Irish parliament in 2011, he started writing memos to Irish Prime Minister Enda Kenny stressing the importance of a strong relationship with China.

His views were heard, and soon there was a surge in bilateral trade and investments from financial firms like the leasing arms of ICBC, China Development Bank and Bank of Communications. Huge investments from firms such as Bank of China Aviation and ICBC Leasing made inroads into Dublin.

"From a personal point of view, I've seen our relationship very much a target of engagement in the past six years," Murphy says with a confident and satisfied smile, sitting in his spacious office at the heart of Dublin's Department of Finance.

Eoghan Murphy, Ireland's minister of state for financial services, believes Ireland could become the new gateway into the European market for Chinese companies after Brexit. Cecily Liu / China Daily

Since becoming Ireland's Minister of State for Financial Services in May 2016, Murphy has aggressively pushed forward the China agenda. With his help, Dublin received a quota for China onshore-financial investment, lodged an application to join the China-led Asian Infrastructure Investment Bank and made highly publicized visits to Beijing, Shanghai and Hong Kong.

Perhaps the timing of his ministerial appointment is fortunate: The Brexit referendum made Murphy realize Ireland could become the new gateway into the European market for Chinese firms, and lost no time in promoting this message.

"With so much uncertainty in the world at the moment, we see ourselves as a rock of certainty and stability," says Murphy.

Citing Chinese President Xi Jinping's recent speech at the World Economic Forum in Davos on the benefits of globalization and free trade, Murphy stresses that Ireland's openness to foreign investment fits exactly into those values.

"We have a pro-business government, we want companies to come in and make investments to create jobs."

Those words bear great similarities to the 'open for business' message that Britain's former prime minister David Cameron and former chancellor George Osborne used to strengthen Chinese ties during their time in government.

But with Cameron and Osborne having left office after the 2016 referendum vote, hints of the new British government, led by Theresa May, somewhat reducing its level of openness emerged when May announced new legal guidelines to closely scrutinize foreign investment in national security-related infrastructure.

Within this context, perhaps Murphy's message chimes more pleasantly with China. For Murphy, strengthening Chinese relations is not empty rhetoric, as Brexit uncertainties have sent a warning to Ireland about overreliance on the UK as a trade partner, and Murphy sees China as an assuring partner in its work to diversify and balance trade.

"We've had a close relationship with the UK. Slowly over time we've exported to new markets and found new opportunities, and this process is happening more quickly because of Brexit." For instance, the sudden devaluation of the pound was a "dramatic" consequence of Brexit-related uncertainties already felt by Irish exporters.

"President Xi spoke about commitment to globalization and countries working together to improve the benefits of globalization for their citizens. I suppose this leads to greater ambition for Chinese firms overseas, and that increases opportunities for a country such as Ireland, which has a global outlook."

He stresses Ireland's unique advantage as the only English-speaking country in the European Union post-Brexit, its common-law legal system's similarity to the UK's legal framework, and its government's open-for-business attitude, all of which are factors making Dublin attractive for Chinese firms who once went big on UK investment as a means of European expansion, but who are now adopting a wait-and-see attitude while Britain negotiates its exit terms.

In addition to attracting Chinese investment into Dublin, Murphy also holds a vision for Dublin to engage with China through the Belt and Road Initiative, financial technology cooperation and educational exchange.

The Belt and Road Initiative, initiated by President Xi Jinping three years ago to strengthen Asian European trade links through infrastructure investment, has gained momentum, receiving support from more than 100 countries and international organizations, more than 40 of which have signed cooperation agreements with China.

In May, Murphy will visit Beijing for the China-led Belt and Road Forum for International Cooperation, where he will explore possibilities for Ireland's further participation.

In addition, Murphy is eagerly waiting for the AIIB's approval for Ireland's membership, which would enable Ireland help fund infrastructure projects in Belt and Road countries and share its own infrastructure development lessons with the AIIB.

"I think the AIIB plays an important role for countries that need infrastructure investment to increase the capacity and scope of their economies, we want to bring our knowledge to use in the AIIB whenever we can."

He stresses that Ireland's engagement with AIIB is not entirely centered on self interest, and that the potential financial gains are less important than the geopolitical gains.

"There may not be returns for the Irish state in terms of financial returns, but there'll certainly be a return for helping other economies to increase their scope and improve the standards of living for their people".

Murphy praises the AIIB's operating model, explaining it achieves efficiency, quick delivery speeds while maintaining low operating costs.

Murphy says the infrastructure funding AIIB helps to channel into developing countries is crucial at a time when the global economy is searching for new sources of growth.

He says: "It's going to be a whole new source of funding in parts of the world that may not necessarily have the resources. The AIIB has come along at an important time to make sure that type of funding can continue and that model can continue."

As a country that has also developed on the back of heavy infrastructure development, Ireland has experience to share with the AIIB, such as lessons in public-private partnership investment, Murphy says.

Public-private partnerships, in which initial government investment helps to reduce the risk of the private sector's investment, attract a great deal of private-sector investment and are also at the core of AIIB's philosophy.

In addition, Murphy sees great opportunities in broader Irish-Chinese fintech collaboration, explaining that Ireland's system of fintech innovation and supply chain could be the fertile soil where Chinese fintech firms strengthen their products and solutions.

Education is an additional area in which Murphy hopes to further Irish-Chinese collaboration, not least because he personally developed an interest in China through teaching Chinese students English during his university days.

In the early 2000s, Murphy taught English as a foreign language to Chinese and other Asian immigrants to Ireland at the Able Academy in Dublin and developed valuable friendships with his Chinese students, whom he describes as "especially committed to family, culture and creativity".

"It was very much interaction outside the classroom that allowed me to understand the Chinese people. They'd always invite me to cultural festivals - films, dance, music. On occasion, we'd all go out as a group and have food and drink and spend time together, and that's how I got a sense of the importance of family in Chinese culture."

Those fond memories and precious friendships prompted Murphy to take up Mandarin lessons when he attended King's College London studying for his master's degree, although he admits to finding it difficult.

"I quickly failed at Mandarin. It was very difficult for me. There's the language, the writing, the tonal aspects. I was trying to continue my relationship with China through language, but wasn't able to keep it up."

Despite not learning Mandarin, Murphy has today found not just one but many ways to continue his relationship with China, including encouraging educational exchanges between Irish and Chinese universities.

He says: "From my visits to the country, I have realized China places a strong emphasis on education. We do as well. We are constantly trying to think of different courses that suit people, help them up-skill, and that's the approach China is taking."

cecily.liu@mail.chinadailyuk.com