Professor Henry Srebrnik

Professor Henry Srebrnik

Monday, April 17, 2017

Chinese-Israeli Economic Relations Continue to Blossom

Henry Srebrnik, [Summerside, PEI] Journal Pioneer

Hoping to boost trade, Israeli Prime Minister Benjamin Netanyahu visited China March 19-21, along with Israel’s largest-ever business delegation. The mission included five ministers in his government.

This was Netanyahu’s second visit to China in four years. Marking 25 years of relations with Beijing, Netanyahu met President Xi Jinping, Prime Minister Li Keqiang, and the head of the country’s parliament, Zhang Dejiang.

While the European Union remains Israel’s largest trading partner, Asia is steadily closing the gap and politically it tends to put far fewer demands on Israel than the EU does.

The Chinese and Israeli heads of government met in Beijing’s Great Hall of the People, where Prime Minister Li praised Israel’s advances, saying it was a world leader in some technologies.

Netanyahu chaired a business and innovation forum, attended by more than 500 participants from both countries, and told them that Israel is well-positioned to help China upgrade its products, services and utilities with better technology. “I believe this is a marriage made in heaven.”

Included were the heads of Chinese conglomerates like Baidu, Alibaba, Wanda and Lenovo. Netanyahu said that he expects investments and jobs in Israel from these companies.

A number of economic agreements in various fields such as aviation, education, science, health and environmental protection were signed, to help Israeli get better access to Chinese markets.

As well, Netanyahu proposed the establishment of a fast track for Israeli and Chinese investors and also raised the possibility of a direct air link between Shanghai and Tel Aviv.

It’s a relationship that continues to blossom, and comes as the two countries continue negotiations over a free trade agreement, with another round of talks scheduled for July.

China is investing in Israel’s hi-tech, agriculture, food, water, med-tech, and bio-tech industries. It is also involved in building infrastructure in Israel, such as digging the Carmel tunnels in Haifa, laying the light rail line in Tel Aviv, and expanding the Ashdod and Haifa seaports.

Since 2013, Israel has seen numerous delegations from the Chinese business community visit Israel. Last year the Israeli Embassy in Beijing issued more than ten thousand visas to Chinese business people.

China is also encouraging the establishment of Israeli innovative enterprises in China, such as Shouguang’s Water City, which incorporates Israeli water technologies.

The establishment of a technological academic institute in Guangdong by the Technion, financed with a $130 million donation by billionaire Li Ka-shing, is another example of the role Chinese business people are playing in promoting bilateral relations.

More than half of China’s oil imports come from the Middle East, and as part of its One Belt One Road (OBOR) initiative, it is investing heavily in transportation infrastructures, such as roads, railroads, and sea ports, across Asia and the Middle East.

The initiative is meant to connect China to European and African markets, and is financed in part by the establishment of the Asian Infrastructure Investment Bank (AIIB), which Israel joined as soon as it was founded in 2015.

“Israel would like to participate in projects under the initiative and hopes China will contribute from its experience in infrastructure to help promote the stability and economic development in the Middle East,” Alexander B. Pevzner, founding director of the Chinese Media Centre under the College of Management Academic Studies in Israel, told the Global Times of China.

China appears willing to approve Israel’s request to be exempt from a new Chinese policy barring investments in foreign countries. Currently, one-third of foreign investment in Israel comes from China, according to Netanyahu, who brought up the issue with President Xi.

According to Chinese estimates, the country’s total investment in Israel in 2015 reached more than half a billion dollars.

The Chinese president also announced the establishment of a “Comprehensive Innovation Partnership” with Israel, which Netanyahu hailed as “a tremendously important decision.”

China is Israel’s largest trading partner in Asia, and Israel’s exports to China have increased significantly over the last decade, going from just over $1 billion in 2007 to $3.3 billion in 2016. Overall bilateral trade volume has now surpassed $11 billion.

 “But economic and trade cooperation hasn't reached the limit, and there is still great potential for growth,” Chinese Minister of Science and Technology Wan Gang said at the forum hosted by Netanyahu.

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