I am in Hong Kong this week on my first mission as Chairman of IFSC Ireland. Hong Kong is the third most important financial centre in the world, after London and New York, and is catching up fast.
China has built up huge savings in its corporate sector. If these funds are invested internationally they can gain a bigger return for the Chinese people and help revive the world economy, and thus the market for Chinese goods. This activity is likely to be channelled through Hong Kong.
My job is to work with the various industry associations and state agencies in Ireland, like the IDA and Enterprise Ireland, to bring more international financial services firms to Ireland.
Already Ireland has 25000 people employed , and over 1000 firms, in international financial services. By establishing close links in Hong Kong, Ireland can use these strengths to maximise the returns on Chinese savings, while creating additional employment .
Dublin is already the 9th largest international banking market in the world, and 6th largest for the issue of international debt securities.
The administration of 49% of the worlds hedge funds takes place in Ireland, and 350 fund promoters from 50 countries have chosen Ireland as the base from which to service their funds.
The international insurance sector has a big presence in Ireland, writing 26 billion euros worth of non Life and reinsurance business, and 28 billion worth of Life insurance business .
3000 international investment funds are listed on the Dublin Stock Exchange. These originate from 40 different countries. There are over 2700 UCITS funds in Ireland with investments of 682 billion euros, and 1245 Qualified Investor Funds (QIFs) with investments of 135 billion euros. Both types of fund operate under EU rules. UCITS are the more conservatively managed of the two types of fund.
These activities have been attracted to Ireland because the country has a well educated, young, English speaking, and flexible, workforce. Ireland has a higher proportion of graduates with finance skills than competing locations. Rents, house prices, wages and consumer prices are falling in Ireland, which reduces costs for firms coming to the country. The 12% corporate tax rate, which was introduced by the Rainbow Coalition Government in 1997, is also a big help.