Ireland and China: Business in a Changing World – with Tadhg O’Callaghan

I mean it's a pretty tough country to do business right? I mean it can be some people say it's the the fitness center for That is the gym. Yeah, you know China is challenging but everyone has its own difficulties too I mean again, I would say those four areas of educational life science financial services and food Welcome to the European Guinexi podcast We bring together young professionals scholars and experts to talk about the evolving relationship between the EU and China If this is something that interests you be sure to catch our new episodes every two weeks and Welcome to the European Guinexi community and today I'm very honored to be here with Taik O'Kalahan the director of Enterprise Island in China. Thank you very much for coming on the podcast So today we're gonna talk about the relationship between Ireland and China and maybe also the European Union and China and I want to start off the podcast with a little bit of your personal career since we have a lot of a lot of young listeners who also are Starting to develop a career in EU China relations So I want to know a little bit what brought you to where you are today? What were sort of the steps on the way? Yeah, so I would like to say that I had this sort of long-term plan to come to Asia But it was somewhat accidental so I went to university in the United States actually after after graduating from secondary school in Ireland and around 2008 the global economy wasn't doing so grace so I was looking around for a job basically and I saw Teaching English in Korea as an opportunity so I moved to Korea in 2009 and then I was doing teaching for a few years and then I decided to Just start a business with two friends of mine and it was more so out of wanting to do something different rather than having a big desire to get into business and That grew and it's quite challenging, but brought it about as far as I could and then after a number of years I saw an opportunity with the Irish government in Singapore for a job related to food promotion promotion across Asia and I applied I actually missed the deadline the deadline was Friday at 5 p.m I submitted it over to the end but I figured they wouldn't check until Monday morning anyway So it worked out and then I worked with them that organization is called Borbija and then I was with them for about two years And then I joined enterprise Ireland about a year and a half ago So our organization then is a little bit different. We help businesses across all sectors and we fund a lot of companies within Ireland and then in the offices abroad We helped them find buyers and send back macro intelligence and things like that. Yeah Yeah, I didn't say you also fluent in Korean I think yeah, well, so I lived there a long time. I lived about 12 years Yeah, I'm and so Yeah, I didn't start studying it properly until about five six years in it's quite a challenging Language as is Chinese obviously So yeah, my my listing would be a lot better than my speaking if you're talking about me I know what you're saying. I would say it's my thing Could you tell us a little bit about enterprise Ireland with your job as what your role is in promoting Irish business in China. What do you do? Yeah, so we are a trade development agency and we've two main functions The first back in Ireland is to Invest in Irish companies and help them develop We invest a lot in R&D and we're actually quite a large venture capital entity in and of ourselves So we put money in tires companies usually at the pre-seed stage and we help them grow Then our second main function is in finding markets around the world So we have 42 offices outside of Ireland and our job then is to find the right partners for them So in enterprise Ireland we kind of a mantra out the right client in the right market at the right time So you know, we have about four and a half thousand clients and not every client is going to be able to sell in every market So it's up to us to find the right face make sure that our companies have the right capabilities going abroad and Then pairing them at the right time with the partners that make more sense. So As I mentioned, we work across a broad range of sectors This does very little bit around the world So what we do in the UK would be quite different to what we do in South Africa or in Vietnam But yeah any any Irish export essentially is is covered by us Mm-hmm. I mentioned that particularly in China. It's a I mean it's a pretty tough country to do business I mean it can be some people say it's the the fitness center for yeah For that of the gym. Yeah, I think there's something to that I think if you if you can succeed in China you can more or less succeed anywhere I really think some of the difficulties in China are more to do with Geography and culture rather than anything distinctive about China. I mean I Worked in Korea. That's a very challenging market Japan is a very challenging market and that's as much because it's very far from home The culture is very different and they they can lean towards protectionism So you know China is challenging but everyone has its own difficulties too I mean US has its difficulties at the moment It's a hyper competitive place, but China if you have the right face and you spend time would try to identify the right partner It can be a fantastic market So yeah, maybe maybe let's develop that a bit further what what makes the company or business China ready would I mean Everybody talks about the business the market being so cutthroat everybody undercutting prices even making losses some In the electric vehicle sector for example. Yeah, so you have to have a world-class product or service to begin with like it You have to have something that the Chinese don't really have or don't readily have or can't do in quite the same way So you have to be strong to start with it You can't be speculative and you need to have done a little bit of research on the market already Beyond that then you need to have a commitment on the ground You need to at least visit the place regularly Ideally have a physical presence and meet people regularly because Communicating by email or video call doesn't really work in China And I think then as well you need to have patience and flexibility It might take a few years and we've had some clients that have been kind of knocking on the door of China for two to three years And only now it's kind of coming to fruition And you need to have some flexibility you need to be able to adapt for the local market It not good enough to say how well we did this in the middle east and a work or we did this in America and I worked in China is China. It has its own requirements So the still gaps there's loads of gaps where our companies can succeed it is challenging but but nowhere is easy Yeah, yeah, okay Maybe let's talk a little bit about the political side of things We had early in 2026 the first European visit of a European head of state in China Prime at the Irish Prime Minister Michelle Martin visited China in January I think that's right first week Matt Xi Jinping at Li Keqiang and the chairman of the National People's Congress Jiao Lhè Tí Atten various events Connecting Chinese investment in Irish investment in China So in light of this visit How do you see the very broad? How do you see the signal Irish relationship at the moment? In the stay night. I think we have a very good relationship at the moment Obviously we're within the EU so everything that we do is sort of with a with a backdrop of the European Union When in that relationship, but we see ourselves as someone of a bridge That's a role that Ireland has played for For decades really we're kind of a bridge for the United States and the Europe or kind of a bridge for the EU now into into the UK And I think we can be we can fulfill that role to a degree with China as well Ireland's poor business were poor portrayed I think culturally were quite a practical people where We're not very dogmatic We're easy enough to get on with it, I think generally And I think the Chinese are open to trade as well and I think they want to there's been some Negativity over the last maybe five to ten years which in relation in the relationship between China and EU I think China and EU are ready to kind of To move on a little bit and get a little bit closer and and see what common ground there is So Ireland is very good at finding common ground. It's it's in our DNA out there Yeah, especially now this geopolitical environment with everything that's happening at the moment We see new geopolitical geoeconomic tensions reshaping global value chains reshaping the global economy Many countries are trying to rethink what kind of trade global trade time paradigm we're moving into trying to find their niche in the markets How how is Ireland adapting to that specifically how's the Sino Irish Relationship you know adapting to these global shifts and it is difficult as a small country as well. We're kind of We're swimming in in the waters We're swimming in in very deterbal and waters that that we don't really have much influence on you know Um, so we have to be nimble and we have to adapt quite quickly Um, I think for us as a country if we stick to our principles as being pro free trade and pro um innovation and pro cooperation I think we'll be able to work out it's it's taking time to listen to our partners and see what it is they want So what is it exactly that the Americans want what is exactly the Europeans want and what did the Chinese want and then we need to sort of Figure out where we fit in. I think you need to These days especially with what's happening in Iran and everything else you have to be You have to be very flexible you have to you have to kind of think on your face um and In our organization that's important that we develop abilities within our companies that they'll be able to adapt. So they'll be able to change their product or they'll be able to produce costs or they'll be able to move to new market. And so we have to make sure that our companies have this nimbleness and our light on their face. Yeah. Yeah, maybe let's delve into that. So how do you how does enterprise Ireland then help companies adapt with this this environment? The key thing for us as an organization is to be very close to the client and we have been very good at that. So we have what are called client advisors back in Ireland and they would work with the client day to day on helping building their capability and informing them about maybe new trends or helping them with funding and grants. And then in the markets and the 42 offices abroad that I mentioned, our job is to send back latest information and it's also the work closely with these these clients too. So we talk to them every evening. We talk we meet them when they're in the market, be a range visits for them. So being close and having a very good relationship with our clients is key because they we have this level of trust that's been built up. And then because of this close daily working relationship, we'll be able to get that information to them and then they can adapt and our organization as well as improve over the years as well. We're able to I think COVID was very helpful actually in that way. We're able to give funding where it's needed and we're able to fill in the gaps when there's a crisis. So I think the trust in the communication between us and our clients is central to that. Yeah. Ireland has very strong companies working in innovative technologies, renewable energies, I think solar energy and offshore are to maybe key areas with for example, Katzus and Dublin out of shore, which are some of your partner companies I believe. What drives Irish companies in this sector or more generally to invest in China? Where because I mean Chinese companies are not sleeping, they're in the market as well. So where is the niche for Irish companies? Where do they see their added value in the value chain? Yeah. So China has become a giant in renewable energy, particularly in this sector. We've seen a bit of a retreats really from America in renewable energy in China is definitely through that void. For us, we're not going to provide a solution to hold it through the value chain for renewable energy. We're not going to be producing windmills and all the the software and all the different components that come with it. But what we will do is we'll have one particular part or two particular parts where we have built an excellent capability. So you mentioned Kastas and Dublin offshore wind. Both of those companies, what they're offering is really quite niche and quite specialist. Now I don't have the technical background. I can give you very sort of a superficial explanation, but Kastas for example, it's a chemical, it's a liquid that's used on the panels and it helps the panels be more efficient and it helps them stay functioning for longer. Dublin offshore wind, it's a particular part in the weighing system that helps it be attached to the shore. As I said, it doesn't have the technical background. But what I'm clear on is that they offer something niche in particular and the Chinese don't have it. And it's something that's not that easy to replicate. No, someone might say, well, in a few years, the Chinese or the Japanese or wherever else might be able to do it themselves. That's true, but that's always been true and it's our job then to help the companies get to the next step. The next higher technology piece, then the next software, the next component that we can develop. There's always a way. And Irish companies are very nimble. And like I said, we have a lot of these excellence SMEs. We don't have many famous giant companies. We have lots of small, medium-sized companies with a very particular offering and they do well here. Yeah, yeah. What's the kind of say? There is the whole debate around, at the moment, we still have some niche, very specialized products in Europe in which we have a key hidden champions. I think they're called sometimes in Germany as well. Have some of these companies do some certain glue with some screws. Yeah, the Michelin de Tintergaut. Yeah, yeah. But even they, I mean, nothing safe. I mean, my way. How do you view this whole debate between on the one hand, how do we maybe shield ourselves against Chinese competition entering the European market? I think recently we've got new figures on Chinese export to two years now, which are records high. Now that America has sort of closed off. So where do Irish companies? And where should we find the balance between dealing with that rising competition and at the same time, continuing collaboration in R&D and collaboration between companies? So in terms of politics or policy, that's not really what our organization does. I would say that everywhere we operate, we do expect some fairness and a level playing field. So I think the European Union and Ireland, we would expect that our companies are given a fair chance to compete effectively in the market here. And I think that has been changing and I think it is easier now for foreign companies to operate. In terms of collaboration versus being protectionist or protecting our own companies, you know, there was a time when the British were worried about the Americans spying on them for their cotton loom technology. You know, like this has been going on forever and you just have to adapt that the world is constantly churning and you just have to make sure that you're a little bit ahead. There's no point in crying over the way things used to be that you just have to adapt how they are and try and get ahead for where they will be. So there's a lot we can do and a lot of Chinese companies are entering into the European market and we can help them. So if they're building factories or if they're opening sales offices or whatever else, we can help them. No, our sister agency, the IDA Ireland, they're tasked with attracting FDI and if they're in a very good job attracting FDI, into Ireland from China, where we would fit in is if there's a Chinese company that needs some capability or something in Europe, we have Irish companies, particularly construction and engineering companies that can help them. So it's finding a way to fit together. Yeah. Okay, let's maybe talk about a little bit more light topic as well. I mean Ireland is also a country with a lot of soft power. It's very popular around the world also, I think increasingly with Chinese travelers, culture lovers. So for example, I believe that education is one of the biggest exports that Ireland has to China. So Chinese students studying in Ireland, that's really called it and I know or not. I think they're also Chinese tourists. I mean, are discovering Ireland as a traveling destination. So how would you assess Ireland's soft power in China, particularly in areas such as education, culture, people, the people exchange? It's very strong. I mean, to use it at least, we punch above our waist. I've been in China about five months and I've been quite surprised by how well-known Ireland is. By contrast, I've worked in Korea and I've worked in Southeast Asia. There's many countries but they might not have heard of Ireland or they would have heard of Iceland. So in China that they already know us and they know things about us is really it's great and they have a good impression. Recently in Chinese New Year on the main TV show, Westlife were on it. It popped from the 90s, which is for us, for my generation, it's surreal. So we're known and we're known in a good light as well, you know. And I think Chinese people, they get on very well. We're both fairly easygoing people, I think, with a kind of a mischievous sense of humor as well. And I think we get on well. Now, you know, Irish people, it always boggles our mind, the scale and size of China. There's five million people in Ireland, which is, you know, third-year city probably in China. So we don't have much in common in terms of scale. But culturally we get on very well. And I think Ireland has a lot to offer as well. We don't, we don't have any preconceived notions about ourselves. We don't have any colonial baggage that other countries might have. So I think we get on well. Yeah. We've got to offer. Yeah. Is that something you cover as well in your operations as Enterprise Island? Is that the DD? Educated, sorry, you asked about education as well. Yeah. So the cultural appeal is a big part in convincing students to come to Ireland. And I think the safety that they experience in Ireland and the one welcome that they get in Ireland. No, they don't particularly like the rain and the cold in Ireland, but that's not much we can do about that. So with education, we try and explain what we have and what they are offering. Offering is and many Chinese students go for that. And we've developed in recent years as well. They're called Transnational Education Program. So joint colleges or joint programs where Chinese students will study in China, but the education and the curriculum is provided by Irish universities. So a lot of universities were partnered with the Chinese university and then Irish professors and the Irish curriculum would be provided. And then they graduate with an Irish degree, but they'll stay in China. So this has been a nice kind of compromise or best of both worlds that we've felt or the Chinese have developed with us over the last number of years. And it's not just Ireland. Many European countries, the Americans, the Australians, they're doing this as well. But it's been very effective for us. And I think we're doing very well compared to our peers. Yeah. Okay. Let's close the podcast. Let's look a little bit ahead of where the relationship is going, particularly Ireland as part of the European Union, where we're going in the future. Maybe you're returning also a little bit to the whole economic side and what we discussed before about the politics as well. So in terms of trade and the investment, where do you see sort of the sectors in China that offer the greatest potential for Irish enterprises? Obviously that's a hard question. I mean, that's for companies to find out themselves probably. But what is sort of the future of Ireland, China, trade, given that China might enter other sectors that Ireland is specializing in at the moment as well. Yeah, it's a good question. So you answered a little bit. It is sort of up to the companies. And then when they come to the market, we try and guide them as best as we can. I would say that the four main areas really would be education, life sciences, FinTech financial services and food. No, enterprise Ireland, we don't cover food, but we cover pet food and food ingredients and agritic and areas like that. I think in general, demographics is a pretty good guiding light. So the average Chinese consumer is older, wealthier, more middle-class. And that can be instructive. They want a higher standard living than maybe their parents did in certain other grandparents. So that gives an opportunity for our medical device companies, our supplements companies. It also helps with pet food because people have more pets these days, they're more middle-class and they're often having fewer children as well. They're more likely to have pets than kids, some people. So we have really high quality food, we've really high quality pet food that fits in. Then education as well, there are fewer children, but the parents of those children want to have a higher class education for them, again than the previous generation. So that's where our universities can fit in. And then as China expands, they need a way to send their capital abroad and bring their capital back. And we have financial services companies that can help in that, particularly through Hong Kong, with many Irish companies that have a presentation in Hong Kong. And we can help the Chinese as they expand abroad and as I say, as they repatriate their capital from abroad. So the demographics and the way China wants, the direction the China wants to go on is helpful for us as a guiding principle. So we can see what our capabilities are, and then we can plan forward and see where we can meet them. So again, I would say those four areas of educational life science, financial services and food would be the main areas. And where do you see Enterprise Island going in 2026, what are sort of your goals for the near future? So we're not a business, we're not a private enterprise, so it's not as if we're looking for 50% increase in profit or anything like that. What we want is steady growth for our clients and we want predictable growth as well. And we want to be as good as we can be as an officer, three officers, Beijing, Shanghai, Hong Kong. We want as well there to be open communication. I think there's been a problem that has asked a number of years that the mood, music around China has become quite dark. And I think it's more negative than reality. Now it's not our job to give a rosy picture or a negative picture. Our job is just to give clear communication. So for this year, I want us to be able to be an interlocutor between our businesses and Chinese businesses and give clear information. Sometimes that information is negative, sometimes it's positive, but open communication is our main goal for this year. And then we would like more Irish companies to enter the markets. And I think even more than that, we want more companies to be able to scale in the market. So entering the Chinese market is great. But to be able to grow is ultimately what we want. And I think just even yesterday, we have a new Irish company in Hong Kong, NetFaza. They have an Internet of Things company involved with shipping logistics. And they just open a new presence in Hong Kong, which is fantastic. But our goal now is to make sure that they grow. So if, you know, their profits are X this year, we want them to be 1.5 X next year and 2 X a year after that and so on. So that's really what we want. We want companies that can scale in the market. That's very, very strong message, I think. Thank you so much for joining us. Thank you so much for this podcast. And also thank you so much for listening and see you in two weeks with the next episode.