The company is to build a €325m biologics drug substance manufacturing facility at an IDA greenfield site at Mullagharlin in Dundalk, next to the M1 motorway, which will employ 400 people.
“We are very committed to Ireland and will make this facility a showcase for the global biotech community,” said WuXi CEO Chris Chen.
Professor Louis Brennan, China business analyst at Trinity College Dublin, called the investment “a big deal” and “a breakthrough” for the IDA six years after the visit of then aspirant Chinese president Xi Jinping.
Last year the Chinese bank CBD turbo-charged its investment in an aircraft leasing company based in Dublin and now has a fleet of 180 aircraft. Avolon, with a fleet of 570 aircraft, is also owned by Chinese interests but led and managed by an Irish team of executives.
Last month the Chinese Government agreed to open its domestic market to exports of Irish beef. Alongside these developments new air services have been launched connecting Dublin with both Hong Kong and Beijing.
Ireland is defined as a small and open economy which depends disproportionately on international trade. For many decades that trade pivoted around the UK.
In the 20th century it broadened out to encompass Europe and North America.
More recently it has stretched in to Asia and no economy is more powerful in that region than China.
For Irish policymakers the key challenge is to maintain a balance between all of our trading partners.
Europe, the Americas and Asia all necessitate differing diplomatic and political skillsets to provide an optimum route for goods and services being sold by Irish companies and businesses physically located here.
Some comparative statistics illustrate the value of targeting China for business. China has a population of 1.42 billion people compared to 509 million in the EU and 326 million in the US.
Yet, China’s GDP is only $10.5tn compared to $18tn in the EU and $17tn in the US. China is growing faster than both the EU and US but off a lower per capita base.
This implies its consumer classes, and particularly those with mid-to-upper incomes, offer tremendous potential for suppliers.
China has already surpassed the US as the largest market for food and beverages. Imports of food and drink were valued at $58bn in 2015 and are growing at a rate in excess of 10% each year.
That fast growth clip creates opportunities for exporters from Ireland but also will support businesses being established inside China as the state moves to become more self sufficient over coming decades.
As that dynamic unfolds Irish companies will want to be active serving the Chinese market but should also be vigilant for opportunities helping large Chinese companies to expand globally.
The pace of growth inside China will absorb significant resources from indigenous companies in that country but many of these are fast approaching the scale and breadth that allows them to think globally.
China’s food processing industry, alone, has over $2tn in revenues and has more than 35,000 processing and manufacturing plants.
According to some asset managers China will produce four of the ten largest food companies on the planet by 2027.
Is it a stretch to believe one or more of these will set down roots in Ireland and use it as a bridge to the EU and American markets?
Or could Irish agri-food groups combine with one or more of these businesses to build out their own products in China itself?
With Brexit continuing to diminish Britain’s standing in the world it is apt that Ireland continues its quest as a benign open economy that embraces open markets and pushes back against nativism and insularity.
Our success in winning globally mobile investment is one measure of that task and securing greater levels of China-centric investing, to complement success with US-based corporations, will enhance our reputation even further.
- Joe Gill is a director of corporate broking with Goodbody Stockbrokers. His views are personal.