We are facing a new era of building relationships between Chinese companies and private investors, on the one side, and companies in the Israeli high-tech industry, on the other side. The Chinese-Israeli connection burgeoning these days calls to mind the first days of the strategic relationship that has developed over the decades between the United States and Israel.
Of the capital invested each year in Israeli technology, 90% originates in the United States; but in view of recent Chinese investments, China could also become a leading player in this arena.
In the coming decade, joint [Chinese-Israeli] economic activity is expected to grow and expand along the "food chain" in the spheres of know-how and technology. This collaboration is reflected in the increase in Chinese investments in venture capital funds; the rise in direct investments in Israeli high-tech companies; the growth in acquisitions of Israeli high-tech companies by the Chinese and the establishment of Chinese research and development centers in Israel, and in joint academic projects, as observed this week [Sept. 29 ], upon the announcement of the huge donation made by the Li Ka Shing in support of the Technion Ñ Israel Institute of Technology.
Might that cannot be ignored
Israeli visitors to China cannot help but notice the tremendous respect and esteem the Chinese feel for the Jewish people and the state of Israel. They perceive Israelis as a highly intelligent people with numerous achievements, from whom they can learn and with whom they can cooperate. Quite a number of Chinese delegations have been visiting Israel. They come here ever more frequently, seeking innovation in various fields, such as agriculture, energy, communications and medicine.
However, the clear potential for collaboration has not yet been realized. Past attempts at cooperation were, for the most part, directed by the Chinese toward forming joint ventures, which so far have not borne fruit.
Recently, we see privately controlled Chinese companies (although still dependent on government support) seeking to enter the global markets on the basis of a business model similar to that employed by the Americans - by means of dollar investments outside China. The Chinese government is increasingly allowing private ownership of businesses and properties, and enabling overseas investments. Yet, such investments have to be officially approved first, and are often subject to various scope conditions and limitations. Anyway, the process, slow as it may be, is radically reshaping Chinese business management.
This newly adopted global orientation of the Chinese economy (as against the domestic business activity, conducted in the local currency of China) opens a new opportunity for strengthening Chinese-Israeli cooperation. After all, taken together, Israel and China account for a quarter of humanity.
Anyone who visited China in recent years could not ignore the might exhibited by the Chinese economy, as evidenced in the momentum of growth, construction and implementation of technological solutions on an unprecedented scale. China seems to have skipped several technology generations toward the center stage of state-of-the-art technology. The urbanization processes, involving the concentration of hundreds of millions of Chinese in swiftly built and fast-growing cities, are bound to require technological solutions in transportation, communications, energy and water supply and health services. Within a short period, China has established itself as the second economic power in the world after the United States, threatening Western economic hegemony. The times when China was part of the BRIC countries (Brazil, Russia, India and China, countries at a similar stage of economic growth) have long since gone by, and it is now a league of its own.