Sino-Israel trade boosted for mutually benefits

09:43, April 04, 2011      

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Israeli government has decided to spend some 28 million U.S. dollars on helping its exporters to increase their business ties with China and India.

Europe and the United States have been in the past the two top markets for Israeli exports. But as both these two are struggling to recover from the 2008 global economic crisis, many Israeli companies have turned their attention eastwards instead to keep the business going.

During a recent visit to Israel, Chinese Commerce Minister Chen Deming said that "China sees great opportunity in its cooperation with Israel," adding "the fields of cooperation have expanded considerably, from agriculture to renewable energy, bio-medicine, electronics, communications and desalination."

Sino-Israeli trade volume reached 7.65 billion U.S. dollars in 2010, nearly 150 times of the number in 1992, when the two countries established diplomatic relations.

Analysts speaking to Xinhua on Sunday said that Sino-Israel trade is mutually beneficial: Chinese companies are looking to buy Israeli technologies to continue their rapid economic development, and Israeli companies are trying to enter China's vast domestic market.


Ilan Maor, managing director of SHENG-BDO Ziv Haft, a leading business development and investment company and a member of the advisory board for that Israel-Asia Center, said that Chinese and Israeli companies are doing business in a wide range of fields.

"Chinese companies come to Israel for a few things but, first of all, purchasing," Maor told Xinhua, adding that "Israel has products that are useful in order to improve agricultural and industrial yields."

Other areas of interests include water desalination, agriculture, clean energy, and IT, according to Maor, who was in Shanghai when he spoke to Xinhua. He, by giving an example, said that the company he was working with at the moment has developed a technology that allows a farm to produce more milk without buying more cows.

"Israel has very advanced technology in various sectors, and China is growing very fast," Maor said. "Therefore, they need a lot of technologies, and Israel is a leading source of new technologies."

When it comes to Israeli companies, Maor said that first of all they are looking to enter China's domestic market, which he described as "amazing."

He added that, while in the past Israeli companies that came to China were looking for a place where they could produce their products at cheap prices, the trend today is changing. Israeli firms are now looking for Chinese partners, both those that can provide funding for a global expansion but also technology partners for continued development.

Israeli analysts are of the opinion that China is also interested in Israeli military technology. However, since much of it is developed either in cooperation with American firms or with funding from the United States, Israel is very cautious in what it can export in this field in order not to act against its understandings with the U.S. regarding military export to China.

Israel is very "strict" in its defense exports to China, and " will not dare to jeopardize its relations with the U.S., on which it depends so heavily," said Dr. Yoram Evron from the Department of Asian Studies at the University of Haifa.


Evron believes that Israel is unsatisfied with the growing trade deficit with China, and apparently is frustrated by, and even concerned about, its "failure" so far to penetrate to the Chinese market.

He noted that Israel has launched several national programs that are aimed at this goal, but none of them has brought the expected results.

"As for Israeli companies, many of them consider the Chinese market as too risky due to allegedly Intellectual Property Rights violations, communication problems, and business cultural gaps," Evron told Xinhua, adding that "therefore prefer not to operate there, or to do it in relatively small scale."

Evron said that Sino-Israel trade relations are first and foremost characterized by their rapid rise over the last decade from around 1 billion U.S. dollars in 2000 to over 4.5 billion dollars in 2009.

The recent-announced funding program is considered as part of a long-term strategy of the Israeli government to assists local companies enter the Chinese and Indian market.

"The Israeli government has made an evaluation on where they believe Israel's economic future lays," said Ornit Avidar, a partner at China-Israel Venture Capital Fund.

"Once they decided that it lays in China and India, they said we are going to put out money where our mouth is," he added.

According to Avidar, the Israeli government has set up several task forces, one of which Avidar is severing, to specify how the government can help, including getting over cultural differences and assistance with establishing the initial contacts.

"To be able to compete in the Chinese market, you need a lot of funding and this is where the Israeli government picked up the glove and said we understand and we are willing to finance," Avidar told Xinhua.

Source: Xinhua

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