Speech by An Taoiseach Mr Bertie Ahern TD
at Fudan University , Shanghai
Thursday, 20 January 2004

It is a great honour for me to address you here today. It is in universities like this that China 's current success has been forged. It is in universities like this that China 's leaders of tomorrow are being prepared to tackle the challenges of the future.

And it is difficult to recall a time in the past century when the future of China held so much promise. The unprecedented development of the Chinese economy over the last quarter of a century has placed this country at the very cusp of global economic development.

This development has seen China 's 1.3 billion people begin a process of integration into the global economy. This integration has not been the involuntary integration into a larger economic order that marked both Ireland and China 's experience in the 19 th Century. China has become a first class economic power.

We in Ireland have watched with admiration as China has begun to bridge the development gap. The fact that our two countries have over the last decade exchanged such an intensive and impressive range of political and economic visits is a sign of the mutual interest we share in each other's development.

For, ladies and gentlemen, looking beyond the obvious differences in geography and scale, there is an undeniable similarity between China 's and Ireland 's recent experiences. In recent years, both countries have experienced unprecedented growth rates and economic progress.

By embracing growth-centred economic policies, both countries are transforming the lives of our people.

Around the same time that Shanghai began to grow as a centre of international business with the establishment of the Special Economic Zone in Pudong , Ireland started to enjoy rates of growth which would have been unimaginable up to then.

Since 1987 we have seen an unprecedented level of development. Our workforce has risen by 74%. Our GDP has risen threefold. Our unemployment rate has dropped from 17.5% to 4.4%. This period of economic success is very much a new experience for Ireland and is one that we are by no means taking for granted.

The social benefits of change are also clear. In my own lifetime and in my own city of Dublin , I have seen huge changes in the quality of people's housing, their opportunities for education and employment, their access to a range of goods and services. I see it in the things people can buy, in the clothes they wear, or in the holidays they can take. Coming to Shanghai and seeing its new buildings, the prosperity of its people, the cosmopolitan feel of the city, I feel that same sense of excitement and of openness to the world and all its possibilities that I feel today in Ireland.

Many have asked what lies behind Ireland 's recent economic success and many theories have been developed. My own personal view is that our recent success can be attributed to four key factors.

Firstly, we have invested in people. Since the 1960s Ireland has invested heavily in education and has as a result developed a highly skilled well educated population. Unfortunately we did not act earlier on the advice of the old Chinese proverb.

"When planning for a year, plant corn,

When planning for a decade, plant trees,

When planning for life, train and educate people"

But when we did commit to investing in education we did so with determination.

We adopted strategic, long-range policies put in place over many years - policies that have placed education and training to produce a highly educated, skilled and dynamic workforce at their very heart. These policies have made an enormous contribution to the emergence of Ireland as a knowledge-based economy.

Almost one in four Irish adults has a third-level qualification - the fifth highest rate in the EU, with 35% of those in the 25-24 age group holding a third -level degree, compared to an EU average of 24.6%. This dedication to learning and training is another striking similarity between our two countries. I am glad to see not only that so many Chinese students are coming to Ireland to further their studies, but also that so many Chinese and Irish universities and Institutes of Technology are forging links and establishing joint programmes. One good example of this is the link between Fudan and University College , Dublin in the field of software and law.

Secondly, we have broadened our economic and political perspectives. Even after we achieved our independence in the 1920s, we continued to be dominated economically by our nearest neighbour. A natural desire to achieve self-reliance led to the adoption of protectionist policies which reinforced our economic isolation.

In the late 1950s we recognised that if we were to achieve economic development, we would have to engage with the world economy. We abandoned trade protectionism and encouraged foreign investment. In doing so we stemmed the haemorrhage of emigration which affected the country at that time.

From the beginning, however, we realised that economic engagement alone could not suffice. In acceding to the EU in 1973 we made clear our recognition that European political integration was essential if Europe and Ireland were to maintain economic and social progress.

Our full engagement with Europe has been a critical factor in our recent success. However, it was no panacea. It took twenty years of engagement, policy adjustment and domestic change for us to reap the economic benefits of EU membership in a tangible way. Initially, adjusting from a protected to a free market economy was difficult. Also, the continuing movement from agriculture to services required painful adjustments. Progress was further hampered by external economic factors such as the energy crises of the 70s and early 80s and high levels of public sector borrowing.

However, joining the European Union changed the context and the horizons in which we operated. Exploring new markets, we succeeded in diversifying our trade considerably and reducing our dependency on our nearest neighbour. Businesses began to establish firm linkages and to gain footholds in markets throughout the European Union, and Ireland became an attractive home for European investment and investment in Europe .

Ireland has proved also that policies of solidarity and do support work. We used the funds supplied by the European Union in an efficient and effective manner. We were able to show that the right domestic policy mix in the framework of the European Union offers a real dynamic for growth and employment. As a result, we are seen as a model for many in the current member states as well as the new.

The European Union itself, of course, could not have succeeded without the foundation stones of respect for the rule of law, maintenance of the sovereignty and identity of the member states and a common commitment by all of those member states to preserving and enhancing the human rights of every citizen. It is only on that basis that the political integration of states that had fought each other for centuries could have succeeded. It is only on that basis that the European Union has been able to enlarge both its scope of operations and its membership over the last half century.

The third factor which lies behind our success has been a relentless pursuit of competitiveness and a determination to move up the value chain in terms of technology, skills and enterprise. In a small open economy such as ours, Irish companies, and the success of our economy more generally, are strongly dependent on exports to increase sales beyond the limits of our small domestic market. Exports have been the main driver of Ireland 's economic success over the past decade. While historically, as a poor country, we had been known for sending our people abroad to find work, now we are famous for the export of our goods and services. This is particularly so in hi-tech fields such as software and telecommunications.

Our exporters continue to innovate and adapt, and have weathered well the storm of difficult international trading conditions in recent years. The cornerstone of this continued success is unrelenting innovation - identifying, developing and working to exploit new opportunities and markets.

The success of the information technology sector in particular has played a huge role in Ireland 's economic progress, and accounts for one quarter of our total exports. The extent of the achievement can be measured in real terms - Ireland is now the biggest exporter of software in the world. The ICT sector generates €51 billion annually, comprises 1,300 companies and employs 91,000 people across the full range of high tech activities - ranging from smaller, specialised indigenous Irish companies to well known international names such as Google, E-Bay, Dell, Intel and Hewlett Packard.

There is another similarity with China which may surprise you. We all know of China 's success in attracting Foreign Direct Investment. Ireland 's world ranking on the Inward Foreign Direct Investment Performance Index has moved from 40th place in the 1994 to 1996 period, to a remarkable 4 th position today. Ireland 's total FDI stock reached €157 billion in 2002. The reasons in both Ireland and China 's case are clear: strong competitive advantages and a highly attractive environment for multinational firms.

The fact that these companies have chosen to locate in Ireland is testament to the competitive features of Ireland 's new economy - high productivity, a continuous commitment to quality, workforce adaptability, innovation and strong customer relations skills.

The fourth key factor behind our success has been the process of social partnership which was launched in 1987 and has continued without interruption since. The social partnership process, which has been endorsed by every Government since 1987, brings together all of the key actors in society: the Government, the employers, the trade unions, the farming sector and the representatives of the civil and voluntary sector.

The agreements fashioned by this process cover the broad range of economic and social policy as well as pay agreements for the period in question. As such they have helped build a national consensus around economic and social policies that have paid rich dividends in terms of employment, growth and social cohesion.

These policies have enabled Ireland to reduce its national debt as a percentage of GDP to a quarter of that which existed in 1987. They have enabled Ireland to plan for and successfully participate in the European single currency, the euro. They have seen the dramatic increases in employment I have mentioned already. They have also enabled Ireland to conduct a sustained and intensive assault on poverty and its causes.

Put together, these factors have resulted in the most extraordinary progress and development for our small nation. It has evolved from one of the poorest and least developed countries in Western Europe to the vibrant, modern, confident nation that is the Ireland of today. And with this newly found confidence our enterprises are embracing the opportunity of doing business in China .

On this visit, I am accompanied by a trade delegation of over two hundred people, all with something to offer, all ready to do business. This is the largest trade delegation ever to have left Ireland and it is a good indication of the interest among Irish companies in the Chinese market.

In September this year, the international community will gather at the UN in New York to review progress towards the achievement of the Millennium Development Goals. The overarching goal is to reduce the number of people living in extreme poverty by half by 2015.

I am deeply impressed by the enormous progress China has made in poverty reduction. According to World Bank statistics, the number of people in China living on less than $1 per day fell from 490 million in 1981 to 88 million in 2002. An average GDP growth rate of 9.4%, complemented by the Government's "8-7" plan for poverty reduction, have clearly made a major contribution to lifting millions of people out of poverty.

In May of last year, the Chinese Government hosted an international conference on poverty reduction in Shanghai . The conference allowed China , and other countries that have had successfully lifted people out of extreme poverty, to share their experiences. China itself is now an increasingly important contributor to development programmes in Asia and Africa .

China is making a major contribution to the global effort to meet the Millennium Development Goals. I welcome Prime Minister Wen's strong commitment to fighting poverty and promoting justice, fairness and equality. Ireland also supports the international effort to reduce poverty, particularly in Africa . We will work closely with China , and other UN member states, to ensure that the Millennium Development Goals become a reality, particularly for the millions of people living in extreme poverty in Africa .

To conclude, ladies and gentlemen, it is the new Ireland that has increased its high-level political engagement with your Government. We want to work more closely together as partners to address the economic and political challenges that face us in our increasingly globalised world.

And it is this new Ireland that is the home to tens of thousands of Chinese young people, many of them students. They will be an important link between Ireland and China in the future. I hope that some of you here today will be able to travel to Ireland in future, perhaps to study, or to work, or to visit friends. You will always be welcome and I am confident that you will have a good time there.

END.