The ‘other’ China seeks Israeli business, too

Like the mainland, Taiwan is enamored of technology developed in Israel, and wants more and better ties

A group of Taiwanese visitors march in the 'Tabernacles' parade held by Christian groups each year on the Jewish holiday of Sukkot, September 24, 2013. (Nati Shohat/Flash90)
A group of Taiwanese visitors march in the 'Tabernacles' parade held by Christian groups each year on the Jewish holiday of Sukkot, September 24, 2013. (Nati Shohat/Flash90)

That Israel and China have excellent business relations is by now well known. But what’s less well-known is that Israel also has a strong business relationship with the “other” China – the island nation of Taiwan, which has a much smaller economy than the mainland, but a very advanced technology sector.

“Taiwan imports about a billion dollars worth of goods each year, and about a quarter of that is metrology equipment to service our active chip fabrication industry,” according to Ernest Lin, a top executive of the Taiwan External Trade Development Council (TAITRA).

Lin’s job is to enhance business relations between Taiwan and other countries, and last week he was in Israel to attend the Technology 2015 Exhibition, a show dedicated to the latest advances in manufacturing, robotics, and industrial equipment.

“Israel imports about $700 million in goods from Taiwan, including chemicals and electronic components, and we have two or three delegations of business people coming to Israel each year,” said Lin.

That’s a lot fewer than the number of delegations that come from China; often, there are two or three Chinese business groups in Israel each week, but, as Lin says, “Taiwan is a lot smaller than China.”

However, the historic rivalry between those two countries is a thing of the past – at least in the business sphere, said Lin. Taiwan (Republic of China), originally known as Formosa, was created in 1949 after Chiang Kai-shek fled the mainland after Mao Zedong’s Communist Party took the reins of government in Beijing.

For years, mainland China insisted that it was the “real China” and often required governments that it had relations with to cut off ties with Taiwan. While the People’s Republic still insists that it represents the one, unified China – in essence claiming sovereignty over Taiwan – it no longer insists on exclusivity in business relationships, and in fact trade between China and Taiwan stands at about $200 billion annually.

“We both believe that business and politics don’t mix, and that’s been to the benefit of both countries,” said Lin.

Ernest Lin (Courtesy)
Ernest Lin (Courtesy)

And to the benefit of Israel, which is able to conduct business with both countries (although not diplomatic relations; Israel recognizes China, and both Beijing and Taipei generally insist on exclusivity in maintaining official relations with other countries). Taiwan maintains an active trade and culture office in Tel Aviv, and holds several trade events in Israel each year – the latest, which took place earlier in June, was a life science conference which brought together researchers from Israeli and Taiwanese universities.

Several large Taiwanese companies and venture capital funds have invested in Israel as well. Taiwan’s Macronix Ltd. in 2001 invested over $100 million into a chip fabrication plant built by Tower Semiconductor in Migdal Ha’emek, and in 2005, Taiwanese chip fabrication firm Winbond bought one of the Israeli divisions of National Semiconductor to establish an R&D center here.

Israel and Taiwan could – and should – be doing a lot more together, believes Lin. “We both have good business relationships with China, and there are a lot more markets to serve there. There’s no reason we can’t all work together on projects that will benefit all of us.”

And Taiwan’s manufacturing base could be a great opportunity for Israeli start-ups to test out their products and services, said Lin.

“You have a lot of start-ups with innovative ideas, and we have a lot of manufacturing in advanced tech products. Taiwan could be a good testing ground for Israeli technology, with advanced tech installed in factories to ensure that they work properly on large scales. There are a lot of ways our economies complement each others’, and the sooner we enhance ties, the better.”

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