Chinese business delegation comes tech shopping in Israel

Chinese business delegation comes tech shopping in Israel

An airport security check that some felt was excessive didn’t sour members of a Chinese trade mission, who see Israel as a source of many technologies China needs to grow

The Chinese delegation at the Western Wall (photo credit: Courtesy)
The Chinese delegation at the Western Wall (photo credit: Courtesy)

Israel, as a country with a plethora of enemies, could stand to make a few more friends — and for that friendship, Israel has begun looking east. Among those potential friends is China, which until now has been somewhat reluctant to engage in full-blown business and diplomatic relations with Israel.

Not anymore, though, Carice Witte, a noted Israeli expert on China, told The Times of Israel.

“China now feels confident enough to use its newfound political weight to begin its involvement in key areas of the world where it feels it has important interests, and one of those areas is the Middle East,” Witte said. Witte, founder and director of SIGNAL — Sino-Israel Global Network & Academic Leadership — wants to help make sure that China is exposed to Israel’s understanding of the Middle East story.

It’s for that reason that SIGNAL, which defines its mission as “enhancing China’s and Israel’s strategic, diplomatic, cultural and economic relationship through academia,” organized a delegation of top Chinese businesspeople to Israel — the first of its kind. The members of the delegation represent firms seeking investment opportunities abroad.

The group of 25 businesspeople and academics from the Middle East Research Center at Shanghai Jiaotong University had already been invited to the Palestinian Authority. When Witte found out about that invitation, she arranged for visas to ensure that they visit Israel as well.

“Now that it has strengthened politically and economically to the point where it sees itself as a growing ‘great power,’ China has changed what had in the past had been a tacit acceptance of Israeli ties to an active ‘constructive participation’ policy, where it plans to become involved in the Middle East,” Witte said. “Part of it is due to pressure from the Arabs, who want China to use its weight in the Israel-Palestinian conflict, but for China it’s about much more than politics: Beijing sees in Israel a strategic regional partner that has much to offer China.”

Why, indeed, would a behemoth like China be interested in making friends with little Israel, considering its strong ties to Arab countries, and especially to Iran — as well as its dependence on those countries for its insatiable energy needs? Actually, it is just that dependence that is driving China toward Israel, Witte said. “Israel’s reputation as an innovator in clean alternative energy production, solar energy, and innovative engineering are well known to China’s leaders, and China is very interested in implementing similar programs in order to reduce its dependence on foreign fossil fuel.”

Besides energy technology, Israel can help China in three other key areas where the needs are great: Water reclamation and purification, agricultural technology and security. “If there’s one thing China values, it is stability, and for stability you need enough food and water and sufficient energy. Israel has faced these challenges head on and has developed the appropriate technologies to deal with them successfully. China sees this example and wants very much to import it,” Witte said.

Naturally, Israel benefits as well, as companies gain access to the huge Chinese market. This past week, Finance Minister Yuval Steinitz signed a billion-shekel deal with China in which Israel will set up water technology projects in China, with Beijing guaranteeing a credit line that Israel will grant to exporters approved for the program. This is in addition to other major Israeli projects already under way in China, including Israeli development of China’s first Water Treatment Industrial Park to introduce advanced water treatment technologies from Israel that serve the needs of the huge China water market.

While things are clearly moving forward, there is still plenty that could go awry in Israel-China relations, Witte said. “There’s never been anti-Semitism among the Chinese people, but plenty of it is now getting into the country, as Arabs and others attempt to sway China to lean on Israel. This is already taking its toll, and Israel must build a broad-based network of relationships with China in order to build an awareness among Chinese of who we are, before someone else does it for us in a negative way.” As an extremely conservative country, China tends to build its friendships slowly, with those friendships based on mutual trust. “Fostering that trust is an important part of what we do at SIGNAL,” Witte added.

Unfortunately, that trust took a bit of a blow when the Chinese delegation arrived in Israel, as well as when it left, said Professor Yiyi Chen, who may be more familiar with Israel and Israeli culture than any of China’s 1.4 billion people. “Among the businesspeople were many who have been to countries that Israel does not get along with, like Libya, Iran, and Syria,” he said. “When security personnel at Ben Gurion Airport saw those stamps in their passports, they pulled over some members of our delegation for thorough security checks that lasted nearly an hour and a half.” Similarly, members of the group underwent lengthy checks when they were leaving the country as well, because they were carrying “suspicious looking” paraphernalia – bags, booklets and trinkets with Arabic writing which they picked up on their visit to Ramallah, where they meet with PA officials.

Professor Yiyi Chen

Chen, who is quite familiar with Israeli ways – he speaks Hebrew fluently, is one of China’s most prominent Bible scholars, and won a prize in 1994 for translating A. B. Yehoshua’s novel Three Days and a Child into Mandarin — understands the concerns, more than the other members of the delegation. “Members of the group were familiar with Israel’s security issues, but it’s another thing to actually experience the practical application of those issues,” Chen told The Times of Israel. “Chinese people are generally very patient, but I think any business person, Chinese or otherwise, would have to be at least somewhat upset over such an extensive security check.”

Nevertheless, Chen said that the group had enjoyed a fruitful trip to Israel and the PA, and had learned a great deal about potential investments. “China has a good relationship with Israel, and has great respect for the Jewish people. I emphasize this when I speak to Arab officials in China, but of course China is interested in promoting peace and coexistence where it can be of assistance. It’s for this reason I believe strongly in SIGNAL’s model of bringing not only high-level government officials to Israel, but also businesspeople,” Chen said. And there is a great deal of interest among many Chinese to learn more about Israel. “They realize that much of what they hear on the news in general is propaganda, so they figure what they hear about Israel is as well. Thus those that can come and see the reality on the ground are most anxious to do so.”

One issue that any foreign company coming to do business in China is advised to look out for is the protection of intellectual property; China not only has a poor reputation in defending IP, but is often accused of encouraging its theft. That’s unfair, says Chen. “IP theft is nothing new and goes on all over the world, including in the West. China’s greater ‘sin’ in this regard is perhaps that it is better and more successful at reverse engineering than many others.”

Nevertheless, he said, the government has made protecting IP a priority. “China realizes it needs to upgrade its economy from its current mass manufacturing base to more of a tech economy. This is already beginning to happen – we are already seeing Chinese-made world-class products and labels being developed, as Chinese consumers demand better quality.” Besides, the government has learned, it can’t bite the hand that feeds it; while many companies are willing to risk the possibility of IP theft in order to enter the Chinese market, figuring that the money they make will offset other losses, China realizes that the companies with the most important technologies — the ones that China most needs — will choose to stay away. “So Israeli tech companies can feel comfortable working in China,” Chen said.

Eventually, it’s possible that Israeli companies may even begin looking east for investments, instead of west, Chen said. “Here in China, there are hundreds of municipalities that are trying to promote themselves as the next Silicon Valley, and each year there are dozens of trade missions to California investigating ways China can repeat America’s success as a high-tech innovator. Eventually I think China will succeed in becoming an important high-tech center, but this may not happen for a while.”

And that’s another important factor for China in seeking better relations with Israel. “Israel is closer than China to the ‘real’ Silicon Valley, in concept and practice,” he said. “Israel can be a bridge to help China achieve the high-tech future it is seeking.”

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