Bertie Ahern (Dublin Central, Fianna Fail)

As the Deputy knows, two-way trade is important in the context of balance of trade. A small number of larger Irish companies are seriously examining the prospect of investing in the Chinese market. On this occasion we were involved with Kerry Group, which is due to open its ingredients plant. It sees a significant gain in investing in the huge Chinese market and has therefore built up contacts and agents there in recent years — as it has done elsewhere — and it now has more than 40 companies worldwide.

A number of fairly small companies producing specialised technology products also see good prospects for them in investing on the ground in China. Few of those companies see themselves establishing manufacturing plants there but rather investing at a certain end of the market. The potential for investment does not involve a large number of companies. From what I have seen, a company needs to achieve a critical mass and have a very dedicated set up to be able to do so. Any company that invests on that basis will not work through local agents.

Last year the authorities in Shanghai brought in a Rover plant from the UK but they are now encouraging some of its big businesses to invest outside China and build up trade in other centres, which is a new departure for China that derives from the huge wealth in that region. There is a potential for Ireland to receive some of that investment too. France, Britain and Germany are fighting for such Chinese foreign investment in a hugely competitive market. In that context, this was my second visit to China in six or seven years, whereas President Chirac and Gerhardt Schroeder, in particular, seem to visit with huge delegations almost annually. Other countries are ahead in terms of attracting investment in a significant manner through building up extensive relationships. However, there are also opportunities for Ireland.

A large number of Irish companies now trade with China both directly and through agents — an area in which there is a huge potential for growth. I admire the efforts made by these Irish companies in order to enter the Chinese market. Many of these companies are small — some are larger — but they have developed business contacts and are doing serious business through agents in Shanghai, Beijing and other regions.

Last year the Irish Presidency of the EU dealt with the arms embargo on China and we brought the issue a long way. There was a great deal of pressure on the Presidency to finalise the matter at that stage but we did not, mainly because the British Government was holding out at the insistence of the US. My view is that the issue will probably be resolved, if not during the Luxembourg Presidency, by the UK Presidency itself, having been the main obstacle to it. I do say that in a cynical manner, but that is how these things happen and that is the position as I see it now. The British Foreign Secretary, Mr. Jack Straw, was in China last week and, judging by his speech, I would think the issues will be resolved by mid-year.

The Department of Foreign Affairs argued strongly that this issue was not just a question of lifting the arms embargo. The argument we made last year on behalf of the European Union was that we were anxious that a decision be made to lift the embargo but that it would not result in an increase in the exports of arms to China. This is consistent with the Chinese Government's assertion that its concern to see the embargo lifted is driven by a desire to normalise relationships rather than one to pursue arms imports. That is its stated position, which has been widely repeated.

In December the European Council called for the early adoption of a revised EU code of conduct on arms exports. Work on this is progressing at a technical level. The Irish view is that we should not lift the embargo until that work is completed and accepted. That will happen this year. It cannot be finished until everyone comes on side. It now rests with the UK's position.

The current code with China has been operational for 17 years. It is a politically binding document, which contains criteria for assessing applicants for export licences for military equipment. These criteria include respect for human rights in the country of final destination and the preservation of regional peace security and stability. That ties in well to the Deputy's question on human rights.

This was the third opportunity in eight months on which I have had the opportunity to meet Premier Wen Jiabao. Interestingly, while the Chinese authorities do not like talking about human rights in the public domain or at press conferences, although Premier Zhu Rongji engaged with the media in a forthright manner in Dublin in 2001, privately they have no difficulty in doing so and accept the point that they must make huge progress. They accept that they are doing so under the EU-China human rights dialogue, of which there have been 17 rounds. They are engaging with the issues. I met the Chairman of the People's Congress — who will meet the Ceann Comhairle, the Cathaoirleach and a delegation later in the year — and he made it clear that they are anxious to engage at parliamentary level on these issues. They are making strides forward.

Nonetheless, the Chinese authorities make the point that theirs is a country of 1.3 billion people, who are part of a very different culture and tradition that includes many aspects which are totally unacceptable to people in Europe. However, the best way forward is to engage with them. I did not discuss Tibet with the authorities this time, although I did so during our last meeting because I had just met the Tibetan group here. They have started dialogue on Tibet, which is painfully slow but progress on the issue is encouraged because all parties raise it. However, the Chinese authorities do not fear this dialogue.

As Deputy Rabbitte will know, representatives of some countries get offended when one raises issues of human rights and do not want to talk about them. However, the Chinese representatives do not. During the EU Presidency, I got into a fierce tangle at a dinner with representatives of Burma-Myanmar, which turned into a shouting match with its foreign minister. I had no option but to get into the shouting match because I was carrying the EU brief. However, this is not the position with the Chinese authorities — they are prepared to engage. They are defensive of their system but they do not argue against the fact that they have to change. They want to do this in a controlled manner.

The last time I was in China, my visit coincided with that of Mary Robinson in her role as UN High Commissioner for Human Rights. It was one of the early meetings in starting the engagement that has continued since then. It has been slow and there are still major difficulties, but there is and has been real engagement. The authorities are still engaged with activities which are not acceptable anywhere but engagement is the only way of moving them forward and they are prepared to do so — they have no fear about talking about the issues.

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