Israel's exports to the Far East this year are projected to exceed those to the United States for the first time, the Economy Ministry said on Sunday.
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Such a development would make the Asian market Israel’s second largest export market after Europe. The Central Bureau of Statistics has already reported that last year, for the first time, Israeli exports to Asia equaled those to the United States.
But two companies, Intel and Israel Chemicals, account for much of Israel’s Asian exports, as other Israel firms are having a hard time diversifying from an approach focused on Europe and the United States.
According to both the Israel Export Institute and Intel, the chip maker accounted for half of Israel’s exports to China last year. The Santa Clara, California-based firm has major semiconductor manufacturing facilities in Kiryat Gat in the south of the country.
In 2012, Israel Chemicals was responsible for a quarter of all Israeli exports to China. Excluding exports by Intel and Israel Chemicals, Israeli exports to China declined in 2012, the Israel Export Institute said.
“Since the [global] financial crisis of 2008, Israeli exports have been chalking up multiyear increases to every [geographic] bloc,” said Ohad Cohen, the director of the Economy Ministry’s Foreign Trade Administration. “In addition to the nominal increases in overall Israeli exports, there have been substantial changes in the distribution of exports by region.”
The share of the United States has been declining consistently, while exports to Europe have been little changed, Cohen said. Globally, Israeli exports are likely to be stung by disappointing sales to India and Brazil and a lack of growth in markets in Canada, Turkey and the Netherlands, Cohen added.
Economy Minister Naftali Bennett has said his ministry and the treasury have developed a program to lower the risk for Israeli exporters.
“At the same time, we are working to seal free-trade agreements with developing economies in Asia, including India, China and Vietnam, and to enhance our presence of trade attaches — to make them more available to exporters,” he said.
The Economy Ministry’s projection for exports to Asia to exceed those to the United States is based on data from more than 20 Israeli export markets accounting for more than 75% of the country’s exports. The forecast is also based on data from international agencies.
The Economy Ministry predicts a 4.7% rise in the country’s exports to Asia this year, the largest increase for any of the world’s regions. That figure is lower than an earlier forecast of 8.5% but still well above the increase expected for exports to Europe — just 1.5%. For the United States, the figure is seen at just 1.3%.
In 2018, exports to Asia are forecast to account for 25% of Israel’s overseas sales, compared with 21% last year, while export growth to Western countries should continue to flag. In 2018, exports to Europe and the United States combined are projected to make up about 60% of all Israeli exports, compared with 63% in 2013.