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.
