Post-Brexit Trade Opportunities: Asia Matters

In the first session of today's meeting we will speak to Mr. Martin Murray of Asia Matters to discuss opportunities for trade with Asia post Brexit. This committee has had ongoing discussions with both the public and private sector on plans for trade following Britain's exit from the European Union. Today's meeting gives us the opportunity to hear about potential for trade with Asia, an area with a population of more than 2 billion people.

We will hear the opening statement from Mr. Murray before going into a question and answer session with the committee members. Before beginning, I remind members, witnesses and those in the Gallery to ensure their mobile phones are switched off completely for the duration of the meeting as they cause interference, even on silent mode, with the recording equipment in this committee room. I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person or body outside the Houses or an official either by name or in such a way as to make him, her or it identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. If they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.

Mr. Martin Murray

It is a pleasure for Asia Matters to be back before the committee. It is our third time briefing the committee and we look forward to an engaged discussion. We have sent the committee some detailed documentation concerning data and statistics, and I propose to focus very briefly on the beginning of the document, dealing with why Asia matters for Ireland. I will also explain why Asia Matters and what we do also matters, providing a very brief overview of the key statistics. I will focus primarily on policy recommendations to grow trade with Asia significantly before answering any questions from the members and hearing their comments and insights.

I will focus on why Asia is a key solution to the Brexit challenge for Ireland. Unlike many people looking at Brexit - we understand those challenges - we see this as an opportunity for Ireland. Asia is the future for global business. This is the Asian century and the Irish economy must make a paradigm shift to capture a share of this boom. This will require Irish policymakers and firms to pivot away from a reliance on post-Brexit Britain and post-Trump America and to focus their efforts more directly on this economic powerhouse of the future. The enormous scale of the combined Chinese, Japanese and ASEAN markets represents an opportunity that is unprecedented with in excess of 2 billion, roughly 500 times the population of Ireland and four times that of the European Union.

Amidst the challenge of Brexit, with Ireland in the worst case potentially losing 30% of exports to the UK, representing an annual loss of €4.5 billion in cash terms, and rising US protectionism which may damage foreign direct investment into Ireland, Asia Matters believes that accelerated trade growth with Asia is a key solution to protect Ireland against major economic disruption and increased unemployment. We need urgently and significantly to accelerate trade with Asia. Approximately 40% of global gross domestic product, GDP, and 60% of global consumers are now based in Asia, with rapidly expanding middle classes that need quality Irish products and services.

To understand the scale of the opportunity we can look at Asia's population sizes, as indicated in our submission. We can also look at the megacities of the world, that is, cities that have a population of ten million or more. Asia has 90% of these at the moment. Within another 15 or 20 years it is looking as if 99% will be in Asia. That is how important Asia is.

Asia Matters was formed more than five years ago. We were created to fill the need for Ireland to have a dedicated space focused on business with Asia. We operate on a not-for-profit and non-political basis. In essence, we are Ireland's only Asia think tank. We engage with a very high-level Asian peer community in business, government and academic sectors. We work closely with team Ireland to create an informed understanding of and opportunity to partner with Asia.

To date, more than 11,500 people from 47 countries have participated in Asia Matters events. We have hosted seven EU-Asia top economist round tables in Asia and Ireland. Recently, we launched the global Asia Matters business summit in Dublin, in partnership with the Department of Business, Enterprise and Innovation. The Asia Matters team has spent more than 20 months in Asia engaging and connecting with key policymakers and business leaders in the region. More than 125,000 people have viewed Asia Matters publications, including the annual Asia Matters Business Yearbook. We believe that the organisation is the go-to place for public policymakers, corporates and the media in Ireland on all matters relating to Asia.

I will now briefly summarise our accompanying presentation. Brexit reaction from Asia is primarily one of deep concern, with Japan in particular openly describing Brexit as a breach of trust. The UK will, of course, remain important. London will remain a top investment and business location for Asian companies. However, within the concerns raised by Brexit, primarily the need for continued access to EU markets, there now exist unique niche opportunities for Ireland in areas such as financial services. A key recommendation from Asia Matters today is that Ireland should become a safe harbour post Brexit for Asian investment.

Looking at the scale of the opportunities for Ireland and Irish companies in Asia, we have outlined some of the really big companies with which engagement can deliver product and service opportunities for Irish companies in their global supply chains either from or in Ireland. If we pick, for example, Huawei in China, it did not exist 20 years ago. Last year it turned over $76 billion, sold 179 million smartphones, employs 170,000 staff and now serves one out of every three people on the planet. Of even greater interest is that with the wonderful news of direct flights from Hong Kong starting on 2 June 2018, Hong Kong is within an hour of Shenzhen, the headquarters of Huawei. Shenzhen is the Silicon Valley of China. We are now connecting to that.

When we look at China, we bring in many experts to Ireland. The common view is that China is misreported in the Western media. There are many Chinas, as there are many Irelands. Each of the provinces in China alone has an average population of 30 to 70 million people each. There are 33 provinces. However, some are in recession and others are growing at 10% to 12% annually. If we look at the trade between China and Ireland, and China is particularly important evidentially when it comes to Asia, this is likely to reach $10 billion by the end of 2017. We include figures in our submission given to us by the Chinese embassy. The current five-year plan to 2020 has a target of $750 billion of Chinese outbound foreign direct investment, FDI. Ireland would be very happy to receive some of that. A recent speech by President Xi Jinping at the 19th National Congress of the Communist Party in China, outlined China's strategic reforms. These play very strongly to Ireland's strengths. We outline these in our submission.

It is important for the committee to understand that there is a whole different IT and ecommerce ecosystem developing in China. It is much bigger than the existing ecommerce systems that exist in America and Europe. For example, Alibaba's recent single day sales amassed almost $26 billion. That is over twice the combined sales of the big days in the US. In our submission we give some figures from the August 2017 McKinsey Global Institute report. It shows that not only is China significantly larger than the US and the rest of the world when it comes to ecommerce, but also mobile payments in China in 2016 accounted for $790 billion. That is more than ten times the size of similar payments in the US. Over a third of unicorns, which are start-up companies valued at $1 billion plus, are already in China.

We have included some graphs to show the scale of Chinese venture capital investment in key technologies from financial technology to artificial intelligence. Looking at the FDI overview, the concerned reaction to Brexit from Asia, allied to the unpredictable Trump Presidency in the US, has created a global business climate that has become very unstable. Many top executives in Asia are very worried about risk management in global expansion, especially in the West. A key finding of the recent Asia Matters global business summit in Dublin was that this creates a unique opportunity for Ireland to present itself as a safe harbour location, given our pro-business environment and global talent pool within an English-speaking common law EU country.

The key question for us is how can we position Ireland as a strategic location hub for Asian businesses that operate globally between Asia, the EU and the US. Last year, Chinese investment in the US tripled. It doubled in Europe as the committee can see from the figures that we present here. The IDA is doing a good job. Ireland is in the top five of European country investments. On average, 14% of IDA new project investment is from Asia and that is moving rapidly to 20%. Equally, Ireland has an immigrant investor scheme. Last year that increased by 500%, mainly driven by Chinese investments working with companies such as Sino-Ireland Capital Holdings Limited. Enterprise Ireland, immediately after Brexit, launched a very successful global ambition programme showing the need for Irish companies to diversify. Exports to Asia are up 16% year on year.

What is great about this is that these are companies all over Ireland in key sectors, including companies such as Kingspan in Cavan and Fexco in Kerry. There are many more of these, including Datalex, Fenergo, and Fineos. At the recent global Asia Matters summit as well, Minister of State at the Department of Finance and the Department of Public Expenditure and Reform with special responsibility for financial services and insurance, Deputy Michael D'Arcy, focused strongly on the difference that China and Japan can make to Ireland's financial services sector. The recent granting of a Renminbi Qualified Foreign Institutional Investor, RQFII, quota of 50 billion yuan, which is €6.9 billion, is a game-changer in our ability to invest in China and our ability to sell investment in China throughout the EU market.

Brexit also presents a unique opportunity for our financial services given the need for EU passporting and access to EU regulators. Food is exceptionally well positioned given Ireland's best-in-class capability, particularly given we have the unique selling point of Origin Green combined with Teagasc. In a ten-year period from 2006 to 2016, Irish food exports to China grew tenfold. We have supplied the detailed figures. It is very interesting to see large Irish companies such as Musgrave in Cork move into the market. It recently successfully launched an ecommerce channel for Irish food products in China, partnering with Alibaba through the Tmall platform. That is a very welcome development.

In education, we have detailed some of the statistics and markets in our submission. Indonesia is becoming hugely significant. It is the only country in the world that is constitutionally required to spend 20% of the annual budget on upskilling the nation. Indonesia has 260 million people, so there are huge opportunities for Ireland going forward. In tourism, China is again the world's largest outbound tourism market, with 135 million people travelling overseas each year, spending $261 billion. Tourism Ireland, supporting Dublin Airport, played a key role in delivering the Hong Kong flight. We have a pending flight as well from mainland China with Hainan Airlines. Fáilte Ireland is doing significant work now, preparing the industry to receive Chinese tourists.

Lack of awareness of Ireland in Asia is one of the major challenges. Many people still do not know who we are or where we are. It is quite common at the end of presentations for Irish professionals in many sectors to be asked if Ireland is part of the UK.

This is a common question.

I will now deal with the lack of Irish resources in Asia. We are doing well. We have engaged with Asia in the last generation and trade is growing very fast but we still do not have sufficient resources on the ground compared with competitor destinations. There is a lack of access as there are no direct flights and no visa facilitation services. Clearly Air France, KLM, Turkish Airlines, Finnair, Etihad Airways and Emirates play a vital role in connectivity for Ireland. In addition, however, we need direct flights. We need them for investors and to sell into Asia. There is also a perception by those who know Ireland that there is a lack of office space and housing in Dublin city centre. We believe the way we present Dublin must be changed. Let us look at the scale of Asian cities. Dublin is not just Dublin city centre but is a metropolitan area. Of course the city centre is critical but people can locate in Fingal, south Dublin or in Dún Laoghaire-Rathdown. I was talking to a Japanese person recently who came to Ireland and they were thinking of locating part of their company, which is headquartered in Yokohama, in County Meath. Our concept of what is encompassed by Dublin needs a broader play. Moreover, Dublin is not Ireland. As I come from Cork, members would expect me to say that. There are many other hubs, including Cork, Galway and the Shannon-Limerick hubs. It is important how we define things. Our policy recommendations are essentially that Ireland immediately creates an online campaign to actively promote why Ireland matters to Asia, followed by very specific sectoral approaches in key markets and we outline this. We can have very early wins on this. For example, Ireland can copy the UK best practice example of a campaign to name all regions, towns and tourism landmarks in Ireland in the Chinese language. This will very quickly go viral on Chinese social media, pick up millions of hits and will be a great opportunity to promote and create highly valuable branding for Ireland.

The Taoiseach, Deputy Varadkar, has spoken of his belief that Ireland should position itself as the global island and we believe that in the significant upgrade to our global footprint on the ground in key markets, Asia should be key. We also believe that it is critical that we position Ireland as a strategic location hub for existing businesses that operate globally between Asia and the European Union and the United States, not forgetting the existing US multinationals here, which potentially will come under threat from US protectionism. Many of these multinational companies have responsibility for EMEA, that is, Europe, the Middle East and Africa but we are already seeing a natural evolution whereby they are taking on responsibilities for Asia from an Irish base. We would encourage that very strongly.

In summary, the Irish State agencies, namely, Enterprise Ireland, IDA Ireland, Bord Bia and Tourism Ireland, are doing a great job but we need to allocate significant additional resources immediately on the ground to help them to deliver their very ambitious yet achievable targets for Ireland.

In our presentation, food, tourism and education are top priorities because they bring economic benefits to all of Ireland, regardless of urban or rural locations. Financial services are also a critical sector as the engine of an economy but they also can be used to leverage Ireland's membership of international financial institutions, such as the Asian Development Bank in Manila or the Asian Infrastructure Investment Bank, AIIB, in Beijing, where Team Ireland can be led in the process by the Department of Finance to open up infrastructure projects and property fund vehicles for companies such as Northern Trust that are based here in Ireland. We very specifically state that Ireland should open a new embassy in Manila with a trade attaché. We should put ten additional marketing staff on the ground in China, primarily to work in food, tourism, higher education and to work with the AIIB. We also believe that Ireland in the past made a core mistake in Japan when we foolishly closed down the FÁS graduate programme in Japan when we closed down FÁS. Under that FÁS programme, which was the envy of all other countries, we placed top graduates - mainly in engineering - for two years with global Japanese companies and during their stay they learned the Japanese culture, language and their way of doing business. As a result of this programme, companies such as Takeda, opened up in Ireland. There are now two Takeda plants in Ireland and the second plant is to service the Japanese market from Ireland instead of domestic Japan, such is the belief in the quality of the Irish workforce. That programme should be restored, but it needs proper funding and staffing and we make some recommendations on this.

We also believe that Ireland should put a minimum of two marketing staff on the ground, one for food and one for higher education in Indonesia, Thailand, India, Vietnam, Korea and Malaysia.

I thank the Chairman.

I thank Mr. Murray for his excellent and detailed presentation. We will have a discussion now but I think the extent of this issue and its subject matter will warrant a further meeting between us. We can raise the issues and recommendations suggested by Mr. Murray with the relevant Departments and State agencies. Perhaps we could review the different issues early in 2018 because Mr. Murray has outlined the extent of the potential in this market.

Mr. Murray dealt with the need for a greater State presence in embassies with personnel from the Department of Foreign Affairs and Trade, as well as representatives from the relevant State agencies, such as IDA Ireland, Enterprise Ireland, Bord Bia and so on. I presume an essential requirement for private companies seeking to gain access to decision makers in Asia, be it in the major corporations or the State agencies in those countries, is the support of the ambassador and his or her staff and the representatives of other agencies. Does Mr. Murray experience the impact of the lack of personnel and does he see it as a key issue the need to resource more adequately the Irish representation in those areas?

Mr. Martin Murray

I think it is a critical issue because while our ambassadors and diplomatic teams on the ground do a very good job, as do the IDA and Enterprise Ireland, in reality many other European destinations have ten times the number of personnel on the ground compared with us, particularly in countries such as China. I will give an example from the key sector of food, whereby Ireland has one Bord Bia person in Shanghai and recently has appointed a second Bord Bia person in Singapore. It is not credible to have two people covering the food sector in all of Asia. We have competitor destinations that have 50 times and more people selling in the same markets. With the best will in the world and with some local staff supporting them, these people are not getting the resources they need. Bord Bia has set highly ambitious targets to double the exports to Asia by 2020. To deliver on this target, it needs more people on the ground, knocking on doors selling. I had the privilege of accompanying the Minister for Agriculture, Food and the Marine, Deputy Creed, on the recent trade visit to Japan and Korea and it was very obvious how effective this was. There were approximately 40 agricompanies there but the common thread was that many people were learning about Ireland for the first time. It takes times to build a relationship and trust.

The same applies equally in education. I can talk to members about Indonesia. Indonesians know very little about Ireland. We recently brought in an education expert from the ministry and that person had no idea whatsoever about Ireland. The only things that expert knew about Ireland was that I am the honorary counsel. We see this happening in tourism. They just do not know who we are or where we are. We need people on the ground constantly selling and telling.

I think that often, Irish people think Ireland is known everywhere. As Mr. Murray outlined clearly, Ireland often is perceived as being part of a neighbouring member state of the European Union.

Mr. Murray compared the two direct flights from Ireland to Asia from 2018, with the number originating in Helsinki, which has a metropolitan population of less than 2 million from a total of 5.5 million in Finland. Are they connecting flights from other parts of Europe?

Mr. Martin Murray

These are direct flights from Helsinki and people from Ireland fly to Helsinki to connect with flights going to Asia. What the Chairman said is very true because of a fallacy in Ireland, which arises from human nature. We deal primarily in a world that is English speaking and we deal primarily with UK, Europe and the US. While we think everybody knows about us, there are very few Murrays, Murphys and Sullivans in China, Indonesia or Japan. As for Helsinki, the airport is still owned by the State. We had a very good discussion with the State airport personnel who, albeit from a different geographical basis, from the outset believed that Asia was critical.

From the time of the setting up the whole structure and the flight patterns, it wanted to focus on Asia and on being a hub for Asians coming into Europe, and vice versa. It is a hub for connecting flights but from the very beginning it was very much driven by the view that Asia was a priority to be focused on. Ireland has not had that history. Understandably, we have focused on Europe and the United States.

I thank Mr. Murray. His comments were very interesting. On the last point, is it purely a matter of resources? What resources is he talking about if we are to increase awareness of Ireland? Why did the programme close in Japan? When committee members travel - I mainly travel to Africa - they note countries want to do business with Ireland because our reputation precedes us. The countries believe Ireland will be ethical and present a good business opportunity.

Mr. Murray mentioned the need for embassies and consulates. In this regard, he mentioned Manila. Are there other places where representation would be vital? We are opening an embassy in New Zealand and there will be a new consulate general in Mumbai. The big countries with the major populations are being considered. Since I have a particular interest in Nepal, I wonder whether Asia Matters has space for such smaller countries. They could have potential.

Recently the Department produced the report on human rights in business. We know there are appalling abuses of workers in some of the countries in Asia, and we hear about them. The abuses may relate to conditions, pay, hours worked or otherwise. The report should be made known, especially to Irish businesses going to Asia.

Irish universities offer a number of degree courses in business and languages, such as Japanese and Chinese. Does Mr. Murray regard the graduates as part of the work he is doing?

Mr. Martin Murray

There are two aspects to the Deputy's question on resources. It is critical to maximise the impact on the ground and accelerate growth. This is the immediate need within, let us say, a three-year phase. Equally, there is a longer-term play, which obviously requires planning and consultation within team Ireland.

Asia is becoming increasingly important. In Asia Matters, the view is that Ireland has a unique and very successful economic model but that it is not sustainable in the long term without a balanced focus on Asia. Of course, we want to keep and expand what we have in the United Kingdom, the rest of Europe and the United States but very shortly Asia will have over half of the world's wealth and over three quarters of the world's customers. Therefore, we now need to be expanding our presence strongly in Asia.

On why the Japan programme closed, it was a question of throwing out the baby with the bathwater. It should not have happened. When the organisation was closed down, the offshoot, which in itself was unique and very important to Ireland, was closed down also. It has not been resurrected. It was a wrong decision and many Japanese people were very upset because senior Japanese people in top companies had, for years, committed to supporting the programme internally within their companies. They saw it as a major loss of face, an embarrassment and a betrayal by Ireland. It takes time to restore that trust. We need to do this, however. We will only do so if we plan and resource the programme correctly.

With regard to other embassies, the Deputy is absolutely right. Asia Matters focuses only on business; we are non-political. We are primarily examining where the quick wins and the medium-term and long-term key wins need to be. We are very open to the idea of other embassies. Vietnam is a great example. Our embassy there was opened under Irish Aid. The relationship has now moved from aid to trade. It is great to see a developing relationship with Vietnam. Potentially, we could open a consulate in Ho Chi Minh City, which by 2030 will be one of the megacities of the world.

With regard to Nepal, I hear what the Deputy saying. I have not examined Nepal but we are very open to the idea. I would not claim any expertise on it. I have had the privilege of meeting people from the country but I do not have core expertise. There are other small countries that are important in their own right but, again, we focus on specific countries. Like every other organisation, we have limited resources and time.

With regard to human rights, of course we would always respect human rights. Policy is outside our remit. We do not set policy; our job is to act as an advisory body. Policy matters come under the remit of the Department of Foreign Affairs and Trade. I understand, however, that in the forthcoming Asia strategy report from the Department, the matter will be addressed. I imagine the report will be out next year, hopefully in the first quarter but definitely in the second.

I thank Mr. Murray for attending. I agree there are great opportunities in Asia. I have been to China on a number of occasions in a private capacity. Last year, I visited with a group of Galway businesses as part of a delegation to Huzhou. We met the secretary of the Communist Party there. He organised a banquet for us on the night. I was sitting beside him and the biggest discussion was on Brexit, its impact on Ireland and what would occur if the Chinese invested in Ireland. When the Chinese invest, they want something back. There must always be something in it for them.

With regard to food, I met our ambassador at a reception in Huzhou. He came down from Hong Kong. I believe he has moved to the United Arab Emirates now. What was his name?

Mr. Martin Murray

Mr. Paul Kavanagh.

Yes. The provinces in China are bigger than Ireland, as members know. The main objective of the ambassador was to twin with the city of Galway. It was interesting that the big Chinese provinces and towns are not twinned with very many European cities. Perhaps Mr. Murray could elaborate on this. Particularly in respect of education, I was told the child is very special in China. If a family wishes to send their child abroad for education, they go to the local Communist Party office and ask what towns or cities around Europe their town is twinned with. Even as late as Monday this week, I met a representative from Huzhou in Galway. There is still a push to twin with Galway. Galway is twinned with Qingdao. I spoke to the city manager and Mr. Paul Kavanagh. I was told there are considerable advantages but we are letting ourselves down big-time because the cities twinned with Chinese cities or provinces are not putting in the work. There are considerable opportunities. Galway is twinned with Qingdao. The world food market conference is to be held there next year. Mr. Kavanagh was telling us we should get out there and work on our twinning. If one is twinned with a Chinese city, one will receive pride of place. Perhaps this is an opportunity on which we should start working. I might talk to somebody about that.

On tourism, a few of us were in Egypt earlier this year. We visited the pyramids one afternoon and were amazed that not one European person was to be seen. They were all from Asia. There were many of them there. There were no Europeans bar ourselves. There is a considerable opportunity in this regard.

GMIT and NUIG in my region have brilliant programmes through which foreign students come here. The big problem is always getting the visa for the student to come in. As a politician, I used to be damned asking to get the visas sorted when Senator Michael McDowell was Minister for Justice, Equality and Law Reform. There was a case in which the son of a very prominent member of the Communist Party was in college in Waterford. The Department refused his visa, which was a huge insult. I got the telephone call about it. In all fairness, the Minister sorted it. I do not know what the system is like now but at the time in question many students came here, spent one day in college, left and were not found again. Many of them were using the visas just to come to Ireland.

That needs to be tightened up. I agree with Mr. Murray that there are major opportunities in China. It is a vast country. Many people say it is a communist country but that is not true. If one was hit by a car in Beijing, it would most likely be an S class Mercedes, a Lexus or an Audi. I recently met a delegation from China in Galway city that is interested in investing in major infrastructural projects due to commence in Galway in the next year or two. They not only want to invest, but they want full control of the project and they want to bring in their own workers, as they do in relation to projects in the Middle East.

Perhaps, as stated by the Chairman, we could discuss the opportunities in this area again the new year. I have been to China a few times and I know it would be worthwhile for members of the committee to visit it to see the opportunities that exist there. We should do all we can to access this market in terms of food and tourism, although I understand access to visas for the education and tourism sectors is a big issue, and I know that people in the Middle East do not like hassle.

Mr. Martin Murray

What the Deputy said is very interesting and true. In regard to twinning, there are currently 14 twinning relationships between Ireland and China, one of which is particularly good. The remainder are dependent on individuals and relationships. The best twinning relationship is the one between Cork and China because people have invested the time and effort in building trust over many years and they have joint exchange of teachers in the education system. They are currently doing a huge project on health care and building future healthy societies. Cork is the most advanced in the twinning relationship. Twinning relationships are very often put together with goodwill, but there is no focused structure behind them. We are planning an event with key people in local government and Government around how to move twinning relationships away from generic relationships which produce nice photographs but in reality have little substance to more focused economic partnership relationships. We need to find areas of co-operation. We hold an Asia matters summit in Cork annually during which we focus on specific sectors and developing relationships therein. Deputy Grealish will be glad to hear we are planning a similar event for Galway and in time for Shannon, Limerick and so on.

The Deputy's comments regarding the tourism area are also true. Ireland is a small country. The greening of landmarks has a very good effect. It is also quite effective when key landmark buildings here turn red to mark the Chinese new year. This could be maximised. Tourism Ireland does a very good job in this area with limited resources. As we have previously stated to the committee, people in tourism often forget that one does not necessarily have to go to Asia to get Asian customers because they are already in Europe. For example, there are 55,000 Japanese people within a 40 km radius of London. There are similar numbers in Paris, and divided between Frankfurt and Dusseldorf. There are similar numbers of Chinese people in London but fewer Koreans. There is no reason they could not come for long weekends, particularly off-season. One of the biggest trends in China and Japan is for ladies in the 20 to 35 age group to visit cities where they stay in five star hotels and spend a lot of money having fun. There is no reason that Dublin, Cork and so on could become destinations in that regard, particularly from European hubs. There is similar business to be captured in relation to Valentine's Day, particularly in Dublin given that the remains of St. Valentine are here. There are opportunities to meet specific needs. In China, there is a huge obsession with authentic experiences, which feeds into the work of Údarás na Gaeltachta in terms of providing people with opportunities to engage with local life in rural communities. This is what people want.

In regard to visas, this is an ongoing issue. We have been told by experts from the World Travel and Tourism Council that countries such as the US and South Korea have changed their visa strategy for China and, in carefully selected scenarios and protecting national sovereignty and risk assessment, are providing visas for up to ten years and this has no detrimental economic effect or criminal effect on the US or South Korea. We need to be bold. We have previously told the committee that because it takes three weeks for a CEO of global Chinese companies based here to get approval to come into Ireland------

They would be doing well to get that approval in three weeks.

Mr. Martin Murray

-----they are going to their London offices instead in respect of which they are issued a common visa in three days. It is important that the visa issue is addressed. In regard to visiting to China, I believe it would be very good for the committee to do that. I am sure the relevant ambassadors in China, Japan and so on would welcome such a visit. It would be good for the committee to see what is happening on the ground in Asia.

I thank Mr. Murray for his submission which was very positive, upbeat and informative in terms of the huge potential that exists in terms of the Asian market. Mr. Murray mentioned that people in Ireland have the impression that everybody knows about Ireland, which I suspect is the result of the greening of buildings worldwide on St. Patrick's Day and so on. However, once that day is over Ireland fades into the background.

I would like to concentrate on the barriers in the tourism area and so on. I have dealt with cases on behalf of people whose family members were waiting six months for visas for a two or three week visit to Ireland. I presume Mr. Murray has engaged with the Department of Justice and Equality on the visa issue. What can this committee do in that regard? Mr. Murray told us of the US experience in relation to visas. Are there practical actions that the committee can recommend to the Department, which I know is reluctant to change policy in this area? Some television stars from China came to Ireland last year. Was there an increase in uptake following that event? When it comes to European tours Ireland is not often not included. In regard to New Grange and other similar sites, are these marketed enough when selling Ireland abroad?

Mr. Murray spoke about the need to promote Irish financial services. Why would someone from Asia choose Irish financial services over similar services in Macau or London? I found Mr. Murray's comments in relation to Brexit very interesting, particularly that while many Brexiteers are speaking about China, Japan and so on as potential markets for investment the Japanese feel let down in relation to their investment in Britain and are pulling out it. Mr. Murray mentioned that businesses are reluctant to locate to Ireland because of the perception that there is a lack of office space and housing in Dublin city centre and so on. Is that a perception or a reality?

In regard to Mr. Murray's comments about embassy footprint and so on, the Department will say that there is a financial cost to embassy provision and that resources are limited. Has Mr. Murray made a business case to the Department in regard to the ten additional people for China and the opening of an office in Manila? Mr. Murray made some very strong remarks about FÁS pulling out of the graduate programme.

I would be interested to hear from FÁS why it did so. Mr. Murray spoke of the potential in education and said there had been a 40% increase in the number of Chinese people studying in Ireland. What is the Department's ambition in this area? It seems a huge increase. Is accommodation a problem when it comes to encouraging this? At the education committee we discussed how some universities seemed to target a city in China by sending a pathfinder.

As Ireland's only Asia think tank providing business learning, does Asia Matters provide advice to companies and prospective investors on human rights? I ask because some of the countries in the region have deplorable human rights records, with some violations carried out by private business. Last month, the Government launched the Irish national action plan on business and human rights, following years of anticipation, although it is not as detailed or robust as many of us would like to see. Has Asia Matters made its members aware of it and does it provide advice to companies who want to ensure they do not get involved in investments that violate human rights?

The map shows how people invest in these countries but one would not even encourage people to travel to some of them, never mind invest in them. Is that a difficulty? North Korea hops out from the page in this regard. Do such matters worry investors in the wider region?

Mr. Martin Murray

The visa is a big barrier. Other countries have succeeded by moving the visa process away from the Department of Justice and empowering embassies on the ground to process visas. Many countries have moved to systems of online approval for visas, which speeds up the process while ensuring its integrity. Resistance to change is human nature but without change there is no progress. The committee might engage with the Department of Justice and Equality to examine, with relevant stakeholders, what other countries are doing, what best practice is and what has been proved to work in a safe and positive way. We would be happy to assist in this regard.

The perception of Ireland is still a huge problem. When I lived in Japan, the Japanese companies only saw England, as they called the UK, France and Germany. I asked a CEO of a company about Ireland and he said Ireland was irrelevant. That was fine because it meant we knew what we were dealing with and could react accordingly. Recently, I spoke to the CEO of a global Japanese company and he thanked me because he had forgotten about Ireland until we met. There is no reason an Asian company will think about Ireland unless we give them reasons to do so.

The Deputy asked me about Ireland's role in financial services. People in financial services are obsessed with risk management and Ireland can be a safe harbour for Asian investment. They are also obsessed with a country's talent pool and we have a very advanced talent pool in regulatory compliance, the fund sector and aviation finance, of which we are the home. Asia Matters is partnering with the Department of Finance and PWC to research Ireland's successful branding as regards financial services in the US and to see how we can amend it to resonate better with Asian financial institutions. Many do not understand the Irish financial services ecosystem and what assets are within it in terms of talent and skill set.

I was asked was space in Dublin a real problem and the answer is "Yes". However, a lot of new office space will come on stream in the coming years. If people feel that opening in location X will create a challenge in respect of visas and family members being able to join, as well as in the areas of office space and housing, while location Y has none of those things then they will choose Y, all things being equal.

Television stars create a buzz on social media but it is temporary. This is the case with greening, too, which is wonderful but needs to be sustained. The flights to Hong Kong are going to be a real game changer and it is estimated that 70,000 will make the journey in a year. We have to ask where they are going to go and we are working on the ground in this regard with the consulate of Ireland and KPMG, with an event in March to discuss how we can build a structure around that flight to create benefits for Ireland.

We are always respectful of human rights and when we get queries from members we redirect them to the right quarters in Ireland to address them. North Korea is not an area of focus within our work and is only considered within the view that, God forbid, if the US went to war with North Korea in any capacity US tourists would stop travelling, which would have a huge impact on Ireland. This reinforces the need not to put all our eggs in one or two baskets but to diversify, and particularly into Asia.

The Deputy asked whether we had done costings and we have started the process of doing that. We have also started to look at the costs of not putting the right resources on the ground, in the shape of lost business.

I thank Mr. Murray for his clear presentation and his precise policy recommendations, which I hope the committee will support. I add my voice to those who made the points about visas, particularly in the higher education sector. This is an ongoing issue for universities and third level colleges as they try to attract students and staff from Asian countries. Mr. Martin's point about decentralising the process to embassies on the ground seems eminently sensible and we should try to make progress on it. The delays are often bureaucratic, rather than caused by opposition to the granting of visas, but it creates a perception that it is difficult to come to Ireland and we want to move away from that.

On the human rights issue, I have travelled in Asian countries and I did some work with the British Council on a women's human rights programme in Wuhan in central China some years ago. I was struck by how the engagement of the British Council, as an arm of the British Government, promoted human rights in China and other countries. Is there any way we can do something like that? I am aware that we do not have the same level of resources and the British Council is very well established, but is there a model, perhaps on a smaller scale, that Ireland could adopt to assist us in the promotion of human rights in parallel with our engagement on trade and tourism?

Mr. Martin Murray

I respect what the Senator said about visas and Asia Matters has a working group on higher education, research and global talent, which is chaired by Mr. Tom Boland-----

Mr. Martin Murray

-----from our advisory board. He is a former chief executive of the Higher Education Authority. Asian universities tell us they are fed up with US and European higher education institutions which just see Asia as a recruiting ground for students.

Yes. We have to be careful about that.

Mr. Martin Murray

They do not want it to be only that. We are working very closely with our Asian peers to deepen the partnership to involve joint research and staff exchanges in both directions. The ideal scenario, which would get around the visa issue, would be for Irish universities to start opening a joint campus presence on the ground in Asia.

Deputy Grealish also made the point that sometimes there is a problem of people going to the same location selling similar courses or whatever and, therefore, there needs to be improved diversity.

Regarding the British Council, while I understand the resource issue, I recall a recommendation from some years back with pleasure that Ireland would have the equivalent of the British Council even as a scaled-down version. That could make a huge difference on the ground promoting our culture, literature, education and, as the Senator rightly said, within that our belief in human dignity and integrity and human rights. That would be a wonderful development. Very often when we have an Ireland House building, we are missing that aspect to it and that perhaps could link into the resourcing on the ground. Equally, we have said in the past that Ireland works best when the agencies and the embassy are all in one building. It is a much better team effort. Our work is very much a Team Ireland collective so I fully respect and endorse the Senator's comments.

I thank Mr. Murray.

Mr. Murray mentioned the Asia strategy the Department is developing. In their briefing note to the committee, officials said they hope to have that finalised in the coming period. Hopefully, it will be in place in the first quarter of the coming year. I presume Asia Matters has made a submission or has been involved in the preparation of that report.

Mr. Martin Murray

We were among a number of stakeholders consulted by the Departments of Business, Enterprise and Innovation and Foreign Affairs and Trade. We gladly responded and gave some solid recommendations.

The potential of education has been mentioned by all my colleagues. Some years ago, I was involved in launching a course in food safety run by UCD specifically aimed at Chinese students on the basis of bringing them into the Irish system and building connections. It is invaluable what can be achieved later when students return to their home countries and get involved in the food industry, probably at a senior level, be it in research or in the marketplace. Apart from trying to increase revenue and numbers by attracting foreign students, is the higher education sector adopting a strategic approach or is every university or institute of technology doing its own thing? Is a strategy overseen by the HEA or the Department? I am bugged by duplication among agencies where they do the same job. This has happened with cross-Border projects and cross-Border bodies where there is not enough synergy or too much silo thinking with individuals going off to do their own thing. There could be a better return for the taxpayer and the proposed recipients of services if there was an overarching strategy and less duplication.

Mr. Martin Murray

All the statistics are provided in good faith but subject to verification. My understanding is that individual higher education institutions can be focused and strategic, particularly in areas such as teacher training. Indonesia is critical in this regard because only 28% of university lecturers there have a PhD qualification and there are significant, fully funded government scholarships for the remaining academic staff to gain such a qualification whereby they go abroad to do a PhD and then return. What makes them particularly important is that when they go back, they are in a position of influence because they are lecturing students in higher education institutions. Such targeted higher education students are important for Ireland and there is a multiplier effect when they go back.

The approach varies among individual universities. Many seem to being doing their own thing. I stand to be corrected but I recall prior to the financial crisis that a fund was put together amounting to €4 million to create an overarching body such as that mentioned by the Chairman, which would provide oversight in order that universities would not duplicate courses or the selling of the courses abroad to the same people but that was scrapped when the crisis hit. We had a meeting where the Department of Foreign Affairs and Trade brought back all the Irish ambassadors from Asia. We were in the room and one ambassador said quite directly in a frustrating manner that he had just been informed by the rector of the most prestigious university in his capital city in Asia that it would refuse to accept any more higher education delegations from Ireland because within the previous six months, four delegations had been there to sell the same courses. The rector had freed up senior management time and he said he could not afford to do that because his staff were too busy. He said to the Irish ambassador that if universities had niche, best-in-class courses, he would be happy to meet their delegations but they would not meet similar universities selling the same courses because it was a waste of time.

I agree with that. As I said following Mr. Murray's initial contribution, we will revisit this issue. The clerk to the committee, the committee's legal adviser and I were discussing the work programme for 2018 recently and one of the issues we discussed was doing a short report on the potential in Asia post Brexit from a trade point of view in the early part of 2018. We are currently doing a major report on overseas development aid. I thank Mr. Murray for his presentation and the material he has forwarded, which will be beneficial to us. We look forward to further engagement with him in the early part of 2018.

Mr. Martin Murray

I thank the committee members for giving their valuable time to be present.

The joint committee went into private session at 10.06 a.m. and resumed in public session at 10.56 a.m.