John Bruton

Opinions & Ideas

Chinese savings and Irish jobs

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.

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1 Comment

  1. Anonymous

    hi John

    if Ireland is the 6th largest banking market in the world, why is this interesting to the third largest financial centre, isn't London still the best place for them in Europe? They also speak English, and surely the euro versus the sterling doesn't present issues to financial companies who deal in all the world's currencies anyway?

    does it boil down to tax rate? the rest of the stuff (educated english speaking etc) is somethign London already has and other european countries will have in a jiffy (the english speaking part)

    either way, what specific areas should the IFSC work on, forgive my blunt speech but repeating statistics to anyone doesn't really matter, business people like the specific benefits associated with a specific deal

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