In 1948 and 1949 two new nations were founded: Israel and the People’s Republic of China.
Israel recognised China almost immediately. It took another 42 years until China, a supporter of Palestine, would reciprocate.
Today, such rocky beginnings are all but forgotten. The two countries have even worked out that their economies are highly complementary. Israel is a land of start-ups which needs capital and new markets to grow. China, the world’s second largest economy (in absolute terms, the largest by purchasing power parity), needs to ramp up innovation to keep growing.
“We are perfect partners,” director of foreign investments at the Israeli Ministry of Economy Ziva Eger said in Beijing last week. “Israel is a little country which had to innovate to survive. If China brings the market, we can supply the talent,” she added.
Traditionally Israeli entrepreneurs have gone to the US to seek capital but in the last two years several big deals have raised awareness there is huge, untapped interest from China (see WiC302 for our article on Li Ka-shing’s investments in Israeli tech firms).
Having cottoned on to this, the Israeli government and the Infinity Group private equity fund last week hosted the first ever China-Israel Technology Innovation and Investment Summit in Beijing – a three-day event attended by senior ministers and more than a 100 companies from Israel.
“China is hot in Israel right now,” Amir Gal Or, head of the Infinity Group, told WiC. “The combination of it being a big market with big capital makes it too important to ignore.”
Gal Or estimates that the summit will lead to more than Rmb20 billion ($3 billion) of deals –a sizeable amount given many Israeli entrepreneurs are looking for relatively small investments.
He also estimated about 50% of the Israeli participants were looking for capital, while the other half were seeking to market their goods or build strategic partnerships.
“Israel’s advantage,” concurred Carol Shaked, HSBC’s head of corporate banking in Israel, “is that it is strong in the sectors China’s government wants to grow in.” HSBC was one of the sponsors of the event.
In 2014 China’s Bright Food group bought a controlling stake in Israel’s largest dairy producer Tnuva. Shanghai-based conglomerate Fosun International has also agreed to buy a stake in the Jewish-state’s largest cosmetic producer Ahava, as well as its fourth largest insurance provider Phoenix.
In fact, one of the surprises of the China-Israel trade summit last week was that Fosun’s chairman Guo Guangchang turned up for a panel discussion on what martial arts and business have in common. Reportedly Guo has been helping Chinese authorities with “certain investigations”. Since then he has only appeared in public once (at his company’s annual meeting).
“We are optimistic about the Chinese economy in the long term, and about business cooperation and opportunities involving China and Israel,” Guo said.
Israeli participants at the summit included Water Gen, a water solutions firm supplying the Israeli army; driverless-car software developer Mobileye; and LeukoDx, which produces portable medical diagnostic equipment.
A queue to meet the representatives of these companies tailed out of the conference room and through the busy auditorium, WiC observed.
“Chinese people have a very positive image of Jews. We are seen as being clever, good with money and innovative. That works in our favour here,” explains Shlomo Maital, emeritus professor at Technion Israel Institute of Technology in Haifa.
Several of Maital’s books – including one on cracking the “creativity code” – have also been translated into Chinese and devoured by those who want to learn the art of innovation and Jewish secrets to success. This inevitably made Maital the star of the summit with excited middle-aged men asking for selfies with him, and signed copies of his book.
“Professor Maital is my hero,” gushed one starstuck fan. Another, who couldn’t speak English, said he hoped to travel to Israel one day. “The Chinese and Jews are very similar, I hope we can do more business together,” he added.
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