Netanyahu, in Shanghai, Looks to Boost Business Cooperation With China

Speaking to a crowd of Israeli and Chinese businesspeople, the prime minister emphasized government support of private enterprise between the two nations.

Sami Peretz
Sami Peretz
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Sami Peretz
Sami Peretz

SHANGHAI -- Eleven hours after taking off from Israel, where he left behind the tension on the northern border and issues including the Iranian bomb and the state budget, Prime Minister Benjamin Netanyahu landed, hungry for results, for a working trip in China.

How hungry? When I told him I'd met a Chinese businessman who represents a large investment firm and who is looking to invest in medical device companies in Israel, he immediately demanded, "Where is he? Bring him over."

Seconds later, his staff had photographed the man's business card and sent him promises that Netanyahu would speak with him personally.

The man turned out to be a representative of Ping An, one of the world's largest insurance companies. A senior manager of the company's venture capital unit, at 33 he had already studied in France and worked at Phillips in Holland and Mackenzie in China.

Will something come of this? It depends on Netanyahu. Striking a deal with such a financial behemoth would give Israel the chance to immediately recoup the cost of Netanyahu's visit, and then some.

Israeli and Chinese businesspeople met at Le Royal Meridien Hotel in Shanghai. Matan Vilnai, Israel's ambassador to China, greeted the crowd with Shanghai consul Jackie Eldan greeted the crowd. These kinds of meet-ups are generally characterized by polite speeches, compliments, good food and the swish swish swish of business cards pulled from pockets and pressed into waiting hands.

The Israelis on hand included Strauss-Elite CEO Gadi Lesin, whose China operations include selling water purifiers through subsidiary Tami 4; Dori Manor, a representative for car importer Lubinski, which brings in Chinese-made MG cars. Some 900 MG cars were sold in Israel last year.

Generally, these meetings do not lead to immediate deals. They just set the stage for future transactions. When a senior politician – in this case, the uber-senior Netanyahu – sponsors the meeting, it is supposed to signal to the businesspeople that the government is there if they need it.

And in China, they need it. China is a nation whose economy is controlled almost entirely by the government, prompting Netanyahu's belief that without coordination between Jerusalem and Beijing, there is no way to break into the Chinese market.

Netanyahu has been tracking the growth of Israel's business relationships in China since the countries established ties in 1992. He sees the most potential in three major fields:

1. Bringing Israeli exports, particularly advanced technology, into Chinese markets;
2. Turning Israel into a land and sea bridge for Chinese exports to Europe via the Eilat port and then the planned railway from Eilat to the center of the country and the Mediterranean sea. Such a move would make Israel a viable alternative to the Suez Canal;
3. Integrating Israeli companies into Chinese investments in Africa.

Netanyahu's eyes sparkle when he talks about this potential.

"This city represents the future of China and the world as a whole," he told the gathered businesspeople in Shanghai. "We believe that Israel can be part of this future. The future belongs to countries that use brainpower in order to produce. If we combine Israeli technology and China's production power, and we export to the whole world, it'll be a winning combination."

Israel has current business representation in China, and it also has diplomacy. This is not enough, Netanyahu says. "We need more," he says, but has trouble articulating exactly what.

When Israel established diplomatic relations with China, trade stood at a paltry $50 million a year. In 2012 that figure had ballooned to $8 billion. Israeli exports to China include advanced electronics, communications, machinery and production equipment, as well as chemicals, diamonds and medical devices. In the other direction, Israel imports from China machinery, electronics, communication equipment, textiles, metals and industrial products. Ultimately, Israel imports from China much more than it exports there – imports were $5.3 billion a year, while exports were $2.8 billion.

Israeli businessmen in China who import to Israel don't need Netanyahu's help. The Chinese are willing to export practically everything without much struggle. The difficulty is getting Israeli exports into China.

Manor started importing Chinese cars in 2010. Now they account for 7 percent of all the cars his company sells. This figure is only going to increase, he says. "This is a company that manufactures 18.5 million cars a year, which is one quarter of all cars made around the world. By 2018 they'll be making half of the world's cars," he says.

In order for Netanyahu's visit to really bear fruit, the prime minister feels that he needs to pave the way for Israeli exporters in China via contacts with the Chinese government. On Wednesday and Thursday he is scheduled to meet with China's new leadership, which was elected for a 10-year term this year. Netanyahu is expected to tell Premier Li Keqiang and President Xi Jinping what Israel's stances are on security matters, primarily the Iranian issue.

It's hard to say to what degree he'll convince them to support Israel on this matter; it's likely he won't receive any concrete promises. And even though it's difficult for Western exporters to break into China, it looks like on this visit, he'll be more successful on the business front than on the security front.

Netanyahu and a Chinese official shaking hands at the Shanghai Jewish Refugees Museum in Shanghai, China.Credit: AP

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