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The Rise of Chinese
Investments in Israel
Israel, once the land of mystery for Chinese people, has recently become their land
of opportunity - for investment. The first ever Chinese tour group landed in Tel Aviv
in September 2008. Now, only in the first eight months of 2016, Israel has attracted
almost 39,000 Chinese visitors, including many business people, and Hainan Airlines
announced, in April this year, the launch of the first direct flight by a Chinese airline to
link Beijing and Tel Aviv, which is expected to further strengthen links in trade, science,
technology and tourism. Aspiring Chinese are also mesmerized by the story of the
Jewish nation's reconstruction out of devastation and many executives come to
first learn about Israeli wisdom, innovation and entrepreneurship as well as, to look
for business opportunities. In 2015, the bilateral trade between the two countries
exceeded US$11 billion compared to a humble US$50 million when diplomatic
relations were officially established in 1992. This article's brief overview analyses
recent Chinese investments into Israel and looks at the future.
A brief overview of recent Chinese Investments into Israel
According to a report from the Israel Export Institute, "exports to China are
significantly affected by changes in the level of exports of dominant sectors:
electronic components, chemicals and minerals." These sectors are dominated by
large companies like Intel and Israel Chemicals. For Israeli SMEs, entering the Chinese
market has proven an arduous challenge. To navigate the Chinese market is an art in
itself and people who are unprepared end up paying "tuition fees." In comparison, the
"purchasing" of Israeli innovation through investments and acquisitions is climbing.
The first ever Chinese direct investment into Israel was when Zhejiang Sanhua, a
refrigeration air-conditioning manufacturer, invested US$10.5 million into Heliofocus,
a solar thermal systems developer in 2010. In the same period, the US$60 million
acquisition of Pegasus, the Israeli digital handwriting device developer, by Shenzhen's
YifangDigitalmarked thefirst everChineseacquisitionof an Israeli company.These two
activities barely received any attention at the time. Not long after, however, when at
the endof 2011,ChemChina acquired the largest Israeli fertilizer companyMaketeshim
Agan (now called "Adama"), the average Israeli citizen started to become concerned.
Many imagined closed manufacturing facilities and thousands of jobs moving to
Once acquired or invested by a Chinese company in a similar industry, the Israeli
company will provide the technological upgrade and western markets, while the
Chinese company provides their domestic channels and marketing prowess.