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will invest in the Israeli company. Then the two companies will form a joint venture in
China. This way, both parties are satisfied–the Chinese company has more input into
adapting the technologies for the local market and a vested interest in helping the
Israeli company to succeed; The Israeli side gets funding, channels and much needed
guidance into the challenging Chinese market.
Challenges
Untilnow,wehaveshownafewwayshowChineseandIsraelicompaniesmaycooperate.
However, there are challenges to face. Firstly, an obvious challenge is the language
and cultural gap. While generalizations are only that, Israelis tend to be innovative and
quick to improvise. Chinese prefer planned and strategic moves. Israelis like the "say
it as is" approach while Chinese prefer to "massage" bad news and rejections before
delivery. Israelis like to list every item for negotiation in a detailed contract whereas
Chinese traditionally prefer framework type agreements and negotiate the details
as the circumstances arise. The next barrier can be a mentality clash between Israeli
start-ups and mature Chinese companies. Some Israeli start-ups are initially thrilled
to find a Chinese giant as partner, only to later find out that they are dealing with
a complex and bureaucratic organization, and that any delays in execution could be
routine for the Chinese but detrimental to the Israeli start-up. In addition, most Israelis
high-tech companies have the U.S. and European markets in mind from their birth,
and later when they decide to enter the Chinese market, discover that their business
models are impractical. Nevertheless, both Chinese and Israeli companies are at the
relatively early stage of their learning curves and despite differences, the two nations
share much more in common in values, respect for family, knowledge and for people
and nations who overcome hardship.
Perspectives about the future
Much can be said about the recent Chinese investments into Israel, some are driven
by opportunistic motivation and others, the majority, are driven by the potential
synergies between Israeli technologies and the Chinese capital andmarket. The overall
ecosystem is maturing all the time, with continuously rising bilateral collaboration
between governments, academics, cultural and business communities. Professional
service providers such as accounting firms, law firms and incubators/accelerators are
equipping themselves with the skills to provide professional and culturally tailored
services that help this growth. In the short term, Chinese investments will continue
to rise. In the long run, we will witness the real fruition of the synergies as more and
more Israeli products and solutions are tested in the highly demanding and dynamic
Chinese market.
Much can be said about the recent Chinese investments into Israel, some are
driven by opportunistic motivation and others, the majority, are driven by the
potential synergies between Israeli technologies and the Chinese capital and
market.