China and the World

The promised land

Li Ka-shing helps to forge closer China-Israel relations

Li Kashing

Li: backs new Israeli tech institute

China and Israel established diplomatic relations only 20 years ago, but commercial activity between the two has been picking up. This year China’s Bright Food won approval to buy control of Israel’s biggest dairy firm Tnuva for $2 billion. Financial firms such as China Everbright and Ping An Insurance are setting up private equity funds that invest in Israel. And this week saw 150 Chinese venture capitalists descend on Haifa to attend the China-Israel Hi-Tech Investment Summit.

In exchange Israel has become one of the founding members of the China-led Asian Infrastructure Investment Bank. Silvan Shalom, vice prime minister of Israel, told a Shanghai summit this week that his government is working to free up entry visas for Chinese tourists, especially business travellers. And Israel may bring in 20,000 Chinese construction workers to build more homes, as part of an effort to tame soaring property prices.

One person to thank for the closer relations, according to NoCamels.com, a Tel Aviv-based website covering Israeli startups, is Hong Kong’s richest man Li Ka-shing.

Li’s flagship firm CK Hutchison is the biggest foreign investor in Britain. But Li has also followed Bill Gates and Warren Buffett in becoming a big fan of Israeli tech firms.

The Wall Street Journal reports that Li’s private capital fund, Horizons Ventures, was the first major Asian investor to make bets on Israeli tech entrepreneurs in 2011. Since then it has invested in at least 28 tech tyros in the country.

The fund’s chief technology officer Gilad Novick is an Israeli who previously worked for Li in Europe. “He often recommends startups to Solina Chau, Mr Li’s longtime companion who runs his venture-capital fund and travels to Israel several times a year,” the Journal says.

In 2011 Horizons led a $30 million fundraising round for mapping and navigation startup Waze. The Israeli firm was snapped up by Google for $1.1 billion two years later. Li then reinvested his profits in another venture that seems to have drawn Beijing and Tel Aviv closer, donating $130 million to Israel’s top-engineering school Technion.

At the same time he also helped to set up the Guangdong-Technion Israel Institute of Technology (GTIIT), a joint venture between Technion and Shantou University, which Li founded. The GTIIT is further backed by China’s Ministry of Education, with an objective to foster technology exchange between China and Israel.

This aspect of Li’s overseas investments runs counter to media reports that his relations with Beijing have deteriorated (see WiC297 for criticism he received from the state media about unpatriotic behaviour). Since then there seems to have been a reconciliation and Xinhua published two articles in a single day recently in which it acknowledged Li’s contribution to China’s development. One article highlighted the importance of GTIIT in promoting Chinese tech. Another revealed that Li’s Husky Energy had helped find a huge offshore gas well in southern China which has provided natural gas to the Pearl River Delta since 2014.

More reassuring news for Li came last week as Li Jiange, the former chairman of Chinese investment bank CICC, was named as the chancellor of GTIIT. “We hope to build a Chinese Silicon Valley backed by the university to promote economic transformation in Guangdong and across the country,” the ex-banker told Caixin Weekly.

The construction of the new institute will start next month and enrolment for undergraduate programmes begins in 2016. Ties with Israel look set to grow, the Wall Street Journal suggests. “Earlier this year, Ms Chau led a group of 50 students to Israel on a four-day trip, where they met with Israeli entrepreneurs and took part in wilderness and survival courses. Mr Li went to Hong Kong’s airport to wave them off,” the newspaper says.


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.