The Israel-China Connection

Over at the United Nations many countries have been indulging yet another round of mindless posturing over the American decision to move its embassy to Israel. They have lined up to condemn Israel, for reasons known only to them. In some cases, we venture to say, they know that the votes are meaningless, so....

Out in the real world, things look quite different. We examined in a past blog the developing business relationship between Israel and India. Today we report on the developing business ties between Israel and China. The story comes to us from the Jerusalem Post.

First, Israeli companies are finding China a good place to raise money.

China is becoming an increasingly attractive market for Israeli start-ups seeking to raise funds, and it may soon overtake the US as its number one investor due to political and psychological factors.

“The Chinese don’t look at politics,” said Edouard Cukierman, chairman of Cukierman Investments House and managing partner at Catalyst-CEL. “The Europeans [and Americans] don’t always, in the geopolitical aspect, look favorably at Israel. The Chinese look at what Israeli innovation can do for their business, what’s in their interest.”

For those who think that the fictional peace process is all that matters, the Chinese think in terms of their national interest. Can you imagine a nation that defends its national interest and does not pursue unrealistic ideals. The Chinese look to Israel for technological innovation. Why, pray tell, do they not look to the Palestinian Authority for technological innovation?

Now, China is surpassing the United States as an investor in Israeli companies:

With Chinese money flowing into Israeli hi-tech companies, it is likely to soon overtake the US as the number one source of foreign investment for the Jewish state. Last year, Chinese money into Israel surged more than tenfold to a record $16.5 billion, according to Thomson Reuters data.

Chinese investors are increasingly shopping for Israeli technologies amid growing awareness of Israel’s “Start-up Nation” brand and philosemitic sentiment.

It seems like a reciprocal relationship, one that is profiting both parties:

Cukierman pushed back, saying that when American and British firms acquire flagship Israeli companies and leverage them with debt, nobody bats an eye. But when China’s Bright Foods took over Israeli food giant Tnuva in 2016, the Israeli press was aflutter, although Tnuva now helps develop dairy products in China.

“For the fastest growing market, which will soon be the number one economy in the world, it’s a huge opportunity for Israeli companies. Once an Israeli company is in China, you need a Chinese investor to become a shareholder in your company to create a real alignment of interests... It’s the best way to access the Chinese market.”

Consider this yet another attempt to look at the reality, and not the drama, of international affairs.