China business ties
Trade between Jerusalem and Beijing is important enough to both countries that government agencies are getting involved
Following up on recent visits to Israel by large delegations from the Chinese government and business sectors, top Israeli economic and scientific officials are meeting with their opposite numbers from Beijing. The intense activity reflects the desire of both countries to deepen their cooperation in commerce and technology.
An inter-ministerial task force led by Israel’s National Economic Council along with a team from the Israeli Ministry of Economy headed by Chief Scientist Avi Hasson is meeting with Chinese counterparts from the National Development and Reform Commission (NDRC) to develop concrete plans to build on an already successful model.
The Chinese delegation, headed by Ren Zhiwu — deputy director-general of the High-Tech Industry Department of the NDRC — arrived in Israel last week for meetings with the Israeli group, the first time the high-level government team has come to Israel. The Chinese delegation is made up of seven officials from the NDRC along with a business contingent of 33 representatives from leading Chinese firms in fields like biomed and venture capital, as well as representatives of several Chinese high-tech/industrial parks chosen by the NDRC to engage in joint ventures with Israel.
As of 2013, China was Israel’s second largest trading partner, with exports of $2.88 billion and imports of $7.99 billion. Electronics constitute 40 percent of China’s exports. The Israel Trade Mission in China lists at least 250 Israeli companies doing business there, and the Export Institute has run numerous seminars designed to help companies get their foot in the Chinese door.
Many Israeli companies are succeeding in the Chinese market. Israel’s Solbar, for example, the world’s largest maker of soy products, has a large manufacturing facility in China, where it makes products mostly for the local market. Solbar’s soy protein and other products are popular among Chinese makers of processed vegetarian and meat products, which are sold to the local market and export to other Far Eastern countries. Solbar, in fact, is one of the few Israeli — or other non-Chinese companies — to have won a top award from the Chinese government for excellence in management.
Israel’s interest in China is not a one-way street. The Chinese are trying hard to woo Israeli firms to the high-tech zones that are sprouting all around their country. One of them, in the city of Changzhou, about 100 miles from Shanghai, is even building a community center with a synagogue and a kosher restaurant, meant to make Israeli entrepreneurs feel comfortable. “We are very appreciative that so many Israeli companies are choosing the Wujin Economic Zone (WEZ) for their China operations,” said Stone Shi, deputy administrator of Changzhou’s Wujin Hi-tech industrial zone. “We want Israelis to feel comfortable doing business in our region, and the new center, 25,000 square meters large, will provide them with an opportunity to enjoy Israeli culture, both secular and religious, and will even offer kosher food — Chinese style, of course.”
Business between the two countries is set to grow in the coming months with the establishment of a $100 million investment fund by Israel’s Catalyst Equity Management and Hong Kong-based Everbright in March of this year. “China has a lot of needs, and we believe that Israeli companies are in unique position to bring in many of the solutions China needs,” said Shangyan Fen, head of Strategic Investment and Development at China Everbright Ltd., and a managing director in the fund. “We are concentrating on bringing in companies that have established solutions in areas like technology, environmental and water technology, manufacturing, and even consumer needs.” Fen expects that the fund will go through several more funding rounds, topping off at some $300 million.
The visit by the NDRC delegation will boost trade even further, said Chief Scientist Hasson. “The meetings between Israeli and Chinese companies within this framework will bring true commercial results,” said Hasson. “It is doubtful if these would have been achieved without cooperation between the two countries on an official level.”
With both governments now going full-force on expanding trade, one day China might become Israel’s largest trading partner, a position now held by the European Union, though the EU’s trade with Israel is currently about three times the value of China-Israel commerce.
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