Economist Economic Unit
June 23 — Two large Israeli firms were bought by Chinese buyers in June, underscoring growing trade and investment ties between the two countries. Hong Kong’s XIO Group agreed to buy an Israel medical-laser manufacturer, Lumenis, for US$510m, and Fosun Group agreed to buy 52% of Phoenix, Israel’s fourth-largest insurer, for around US$470m.
Analysis
The acquisitions come amid a surge of bilateral business deals. In April China’s Bright Food completed its acquisition of Tnuva, Israel’s biggest food manufacturer. JT Capital, headed by a Hong Kong-based businessman, Li Haifeng, is considering purchasing another insurer, Clal. Shanghai International Port Group won a tender in March to operate a new port in Haifa, while the China Harbour Engineering Company won the tender to build a new port in Ashdod.
In May a joint venture between China Railway Group and Israel’s Solel Boneh construction group won an US$800m contract to develop the first segment of Tel Aviv’s long-delayed light-rail network. In the high-technology sector, the value of start-up financing rounds involving Chinese investors tripled between 2012 and 2014, to US$302m, and stood at US$117m in the first four months of 2015; these rounds are traditionally dominated by US investors.
Israel has shown relatively little concern about the growing Chinese presence. Workers at Phoenix staged a strike the day the
sale was announced, but it was to underscore their demands for a bonus once the transaction was completed, not out of concern over the new ownership. Some Israeli critics have highlighted China’s poor reputation for food safety or intellectual property rights, or concerns over political interference in Israel’s domestic economic policies, but no deal with a Chinese company has been scuttled due to national security or other fears. Ties are likely to develop further, especially in technology, where Chinese companies aim to tap Israeli innovation to move up the value chain, and big infrastructure projects with long project timelines.
The government has supported the increased interest from China, given the country’s growing economic weight and with traditional markets in Europe perceived to be in decline. Politics is also a factor. The anti-Israel boycott movement has no traction in China, and its government makes no political or human rights demands of Israel, unlike EU states and the US.
@ babushka:
BB:
I am not an altruist, and I care little about mass murders, unless the victims are Jews. Inasmuch as the Chinese never have been known to have laid even a finger on Jews throughout their history, whatever else they choose to do with their immense power suits me fine. As Stalin once was quoted: “One death is a tragedy. A million deaths is a statistic.”
Am I selfish about these matters? I certainly hope so.
As you know from my consistent comments, I am interested mainly of policies that would augment the power of the Jewish nation and the Jewish state. I think China could and may even have a future major role in the accomplishment of those aims.
And if that can be maneuvered into reality, it will happen only because China shall perhaps be perhaps the strongest power on this planet, with a government not at all diffident about using that power for their national purposes.
There may come a time when vast and implacable Chinese armies, backed by air and sea power, shall sweep across the Islamic lands of southern Asia, as did the armies of Genghis Khan, his sons, and even his grandsons, in the 13th century. They came closer to utterly destroying Islam than any other aggregation of power in world history.
If it happens again, there once again will be no power in the West to stop them, exactly as happened in their invasions of Europe and the Middle East 800 years ago.
That is precisely the kind of power with which the Jewish nation and Jewish state should do whatever is necessary to build and maintain good relations.
Arnold Harris
Mount Horeb WI
China is a good trading partner for Israel because there is no escaping the fact that the mass-murdering Chinese regime is evil. This recognition will allow Israel to deal with China in a clear-headed way, as opposed to the dangerously unrealistic romanticism with which Israelis regard America.
@ Bert:
Bert,
Western-style moral considerations are minor to Chinese businessmen; business considerations are major. Meaning: The greater their investments in Israel, the more leverage they will apply to the Chinese government to help protect those investments. China, you surely are aware, is the world’s most outstanding capitalist society despite the old-time Maoist flags, peoples republic this and that, and so forth. Therefore, heavy Chinese investments in Israel is a big-time good thing for the Jewish state. Do this on a sufficiently extensive basis, and chances are that China would use its permanent UNO Security Council seat to veto and anti-Israeli resolutions. And why not? That is precisely the way all sovereign states deal with one another.
Should the Jewish state make deals with devils? What in hell else do you think Israel has been doing wherever there was something for the Jewish state to gain? Do I approve of that kind of behavior? I do indeed.
Arnold Harris
Mount Horeb WI
I can see where China benefits from Israeli talent. I am much less clear where the whole nation of Israel benefits. I fear that if China should decide that it is in its interest to join with Israel’s enemies they would not let moral considerations interfere.