Creative Israel good for Beijing’s goals

My op-ed for China’s Global Times English edition also made it to the front page of the English edition of the People’s Daily (the parent newspaper of Global Times).

Creative Israel good for Beijing’s goals
Global Times | 2013-5-9 22:18:01
By Alexander Pevzner
Illustration: Liu Rui/GT

Illustration: Liu Rui/GT

Israeli Prime Minister Benjamin Netanyahu is wrapping up his five-day visit to China, his first such visit as the top Israeli leader since May 1998, and the first trip by an Israeli prime minister since Ehud Olmert came to China in 2007.

The development of Israel-China ties so far and the changing situation in the Middle East both present an opportunity for the two countries to boost their ties.

Netanyahu has often said that he wants to boost Israel’s trade with China, and even double it from the around $8 billion in bilateral trade last year.

The focus of the visit is the signing of agreements in areas like agriculture and water, Israel’s strengths. China’s ambassador to Israel, Gao Yanping, recently said the China-Israel relationship is in its best-ever shape. Israel cherishes its ties and long friendship with China, and Netanyahu’s visit aims to demonstrate this.

Israel and China enjoy fruitful cooperation in many areas. Israel, the “start-up nation,” is well known for its innovation and technological prowess, whereas China offers a huge market, strong manufacturing capabilities, and highly trained and diligent work force.

China would benefit by encouraging its enterprises to establish research and development centers in Israel, and by investing in Israeli companies, like numerous world-leading technology companies have done.

There are signs that this is gradually happening. There is already a leading Chinese technology company that has set up a R&D center in Israel by investing in a local company, though the firm is keeping a low profile for now.

Another large Chinese company, Shanghai Fosun Pharmaceutical (Group) Co., Ltd recently said it would buy a 95.6 percent stake in Israel’s Alma Lasers Ltd for $240 million. This is Fosun’s first acquisition since its public offering.

Israel is also especially strong in areas where China’s needs are greatest: food, water, and clean energy. For instance, Israel’s milking technology has improved yields worldwide, and most of Israel’s drinking water is desalinated from seawater.

Israel has large offshore gas deposits as well. For example, the huge Leviathan natural gas field has estimated reserves of 18.9 trillion cubic feet (TCF). Another field, Tamar, holds 9.7 trillion TCF, which is over half of what the entire EU consumes annually.

These, and many other discoveries, mean that Israel is about to become an energy exporter with Europe and Asia the likely destinations.

Tourism is another area where there’s further potential to expand bilateral ties, with more direct flights needed to meet the demand.

The two countries can also explore opportunities for investment. For example, famed investor Warren Buffett expressed confidence in the Israeli economy by personal example. Buffett said on May 2 that he plans to buy the remaining 20 percent of Iscar Metalworking Co. for about $2 billion, after buying 80 percent of Iscar for $4 billion in 2006.

The latest deal values the cutting-tool maker at about $10 billion, about double its valuation in 2006.

The recent turmoil in the Middle East provides China and Israel many opportunities to cooperate. The entire region is in the middle of the most sweeping changes since the 19th century, and Israel is one of China’s most stable partners in the Middle East.

This week China is also hosting Palestinian President Mahmoud Abbas. China is seeking a greater role in the region and in world affairs.

Israel is constantly striving to achieve peace with its neighbors. China’s good ties with Arab countries can play a positive role in this regard.

The author is CEO of Pevzner Greater China Communications, a consultancy.