Four years ago Gree Electric’s chairwoman Dong Mingzhu made a Rmb1 billion wager with Lei Jun, challenging the Xiaomi CEO that his tech firm’s revenues wouldn’t surpass Gree’s in five years (see WiC266). Dong later claimed the bet was void when Xiaomi began investing in bricks-and-mortar stores to bolster flagging sales.
But for Hugo Shong, chairman of IDG Capital, the bet is still on. Speaking after Dong and Lei at the third China-Israel Investment Summit, held in Hong Kong and Zhuhai this week, he decided he would “start with a joke”. The punchline was that as an investor in Xiaomi, Shong hoped Lei would still win the bet. Even more conspicuous was Shong’s vision for the conference’s host city, as he promoted Zhuhai as the centre of the Greater Bay Area, instead of Hong Kong, Shenzhen or Guangzhou.
The Bay Area concept was proposed by Premier Li Keqiang earlier this year, and refers to the integration of the urban economies along the Pearl River Delta. The notion has been met with some consternation in Hong Kong (see WiC358), although it is among the numerous candidates that sees itself as the regional leader.
Michael Israel, HSBC Israel’s CEO, suggested to WiC that Hong Kong is beginning to promote itself as a leader in fintech in order to distinguish itself from its competitors. This was a view echoed by Jacob Elbert of Invest HK, who was also at the conference, although he conceded that due to the traditional culture of many banks in Hong Kong, this change is coming slowly. “Like the Chinese say: man man zou.” (Go slow; be safe.)
This “slow and steady” mindset was highlighted many times as a hurdle for business relations between China and Israel, with the latter preferring direct and efficient transactions to the tea sipping style of China. No doubt the 200 or so Israeli firms attending the event – primarily from the tech and life sciences sector – relished the opportunity for frank talk with Chinese investors on the fringes of the event. (The biggest buzz was around ReWalk’s robotic leg technology that enables those confined to wheelchairs to walk again.)
Doron Weitz, HSBC Israel’s head of marketing, told WiC that these tête-a-tête talks were the real selling point of the conference. According to Weitz there were roughly 9,000 meetings arranged over the two-day event in Zhuhai. Indeed Chinese interest in attendance was so great that the police had to get involved to manage the crowds trying to register on the day (about 6,000 showed up).
This surfeit of registrations demonstrated what the heads of Infinity Group – the co-organisers of the conference and a leading Israeli-Chinese private equity fund – feel is a key attraction of Zhuhai.
When asked why the coastal city – a bridge away from Macau – was chosen as the destination for this year’s conference, Avi Fischer, co-chairman of Infinity’s board, explained that Zhuhai is willing to commit resources to promote the city. “Shanghai is flooded [with events],” he said. “We wouldn’t have been given a conference centre and commitment like this if we went there.”
This echoed a message given to Israeli investors at the conference by Steven Wang of HighLight Capital. During a panel discussion Wang dissed another contender for the “centre” of the Bay Area. He said: “Don’t go to Shenzhen, because if you go there you’ll be a nobody. So instead come here, to Zhuhai, where you’ll be a bigger fish. Help them be better here.”
So will Zhuhai – a smallish city of 1.6 million people – attract many of these Israeli companies as a base? Its chief infrastructural advantage is the new bridge that will open later this year, and making Zhuhai reachable from Hong Kong’s airport in just 20 minutes by car (or close to an hour from Hong Kong’s financial centre). In fact, this week Zhuhai also proposed its airport could serve as Hong Kong’s fourth runway, catering to private jets and cargo traffic.
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