Dáil Éireann Debate, Tuesday - 10 May 2022
80. Deputy Aindrias Moynihan asked the Minister for Foreign Affairs if his Department has reviewed the current situation with congestion in the port of Shanghai, the implications this will have for global supply chains and ultimately its impact on the Irish economy; and if he will make a statement on the matter. [22968/22]
Amharc ar fhreagraWe saw how the Covid-19 restrictions disrupted supply chains and led to price increases in many scarce materials. China has severe lockdowns at present and Ireland does a great deal of trade there, at in excess of €28 billion in goods and services. What measures are being taken to minimise disruption to supply chains and to minimise price increases?
Many people here are already struggling with the cost of living and inflation.
As the question had a specific focus on congestion at the Port of Shanghai, I went to some trouble to try to get the Deputy an answer on this particular issue. The Department of Foreign Affairs, together with the embassy in Beijing and consulates general in Shanghai and Hong Kong, is closely monitoring the Covid-19 situation in China. This includes the current challenging circumstances in Shanghai, a city that has been under lockdown for more than a month. I am also aware of reports of shipping congestion at Shanghai Port attributed to the impact of public health measures there and the related impacts on global value chains.
One of the main responsibilities of the Department is ensuring the welfare of our citizens abroad. The consulate in Shanghai is providing consular services to a number of Irish citizens and is also providing support to the Irish business community in Shanghai. The embassy in Beijing continues to liaise closely with the wider Irish team, including the consulate in Shanghai and the offices of State agencies, to ensure that the impact of this lockdown is as limited as possible on Irish businesses in China.
Despite the pandemic, bilateral trade between Ireland and China continues to grow. This reflects Ireland’s strong trading performance globally. Trade in goods was worth more than €20 billion in 2021. In 2020, total bilateral trade of goods and services was worth €28.8 billion. We continue to engage with China to ensure a strong trading relationship and one that is in line with our values.
Last month, my colleague, the Tánaiste and Minister for Enterprise, Trade, and Employment, published a new Government trade and investment strategy, Value for Ireland, Values for the World. One of the seven priority actions of that strategy is the establishment of an expert group on global value chains and supply chains to identify global supply chain opportunities and threats. The group will examine themes such as economic nationalism, open strategic autonomy, and reshoring initiatives. The Department will contribute, as appropriate, to this expert group. This will include providing economic updates on key markets globally as requested, including China.
I understand the Shanghai consulate is supporting Irish citizens and the business community there. Does the Minister have a measure of how the lockdown is impacting on them, their businesses and their ability to conduct business back and forth to Europe and globally? More than €20 billion in goods is traded each year. There are now more than 500 vessels stuck in congestion outside Shanghai and other major Chinese ports. This will have an impact on the individuals and their businesses. The availability of these materials here will have a knock-on effect on the cost. How many Irish citizens are involved? Will they and their businesses be able to get through the lockdown? The very severe lockdown has already been in place for a month.
I have quite a lot of information on the number of citizens and so on that I can send to the Deputy afterwards if it would be helpful. He clearly has an interest in this issue. The Irish Embassy in Beijing, together with our consulates in Shanghai and Hong Kong, are working closely with State agencies to assist Irish businesses and citizens to manage the impact of the ongoing Covid-19 restrictions in China. These are challenging circumstances. Movement in and out of China has become very difficult with flights at approximately 2% of pre-pandemic levels. Ireland has continued to engage directly with the Chinese authorities to ensure positive bilateral trading relations. Our embassy in Beijing and the four Irish State agencies operating in China participated in the China International fair for Trade in Services in Beijing last September. Ireland was a country of honour at the fair. It also participated in the China International Consumer Products Expo last May. Both served as excellent opportunities to raise Ireland's profile to a wider Chinese audience and to assist Irish companies to grow their businesses in China.
I thank the Minister. Many people here are struggling with the cost of living and inflation is running at almost 7%. Energy prices are seen as a huge component of this. More and more everyday items are becoming involved. This is impacting on the cost of living and challenging people. As I said earlier, we saw how the disruption in insulation and timber impacted on construction costs after our lockdown.
This is affecting €20 billion worth of all types of goods, including machinery, electronics, dishwashers, fridges and textiles coming out of China. There is disruption in supply and subsequent price increases are expected in scarce materials here that will hit the cost of living for people and put more pressure on them. It is not exclusively an Irish problem. It is also hitting people throughout Europe and globally. Has the Minister engaged with EU colleagues on measures that could be taken and on co-operating to see whether the disruption and cost for people could be minimised?
Foreign direct investment has deeply embedded Ireland in global value supply chains and, in turn, supported Irish companies to access value chains driving productivity and innovation growth. The current geopolitical environment, coupled with the impact of Covid and the twin green and digital transitions, has placed increased focus on future global value supply chains. In this context, therefore, it is important to consider the associated risks and opportunities for Ireland. As I mentioned in my response earlier, the Government's latest trade and investment strategy has a strong focus on supply chain preparedness and risk. The establishment of an expert group on global value chains and supply chains will be an important step to move the plan forward. What the Deputy says is true. We are seeing a fundamental rethink in much global trade. The contribution of the Covid experience, whereby many companies found they simply could no longer rely on global supply chains, and war in Ukraine and countries linked to it, reinforces this. This will focus a rethink of the globalised economy in this regard.
