In role reversal, Beijing businesses looking label ‘Made in Israel’

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JOHNSON LIU, deputy director-general of the China Foreign Trade Center, addresses Israelis in TA Photo: Shlomi Mizrachi

JOHNSON LIU, deputy director-general of the China Foreign Trade Center, addresses Israelis in TA Photo: Shlomi Mizrachi

From the Jerusalem Post September 3, 2013

Visiting Chinese trade reps tout Israel’s “world-class products.”

The ubiquitous “Made in China” stamp that for years could be found on cheap manufactured goods in Israel and around the world is gradually giving way to a new economic reality.

On Monday, representatives from Canton Fair, China’s largest trade exhibition, met in Tel Aviv’s David Intercontinental Hotel and urged Israeli businesses to join the event in mid-October. But for the first time, they were not courting just importers to distribute Chinese goods to Israel; instead, they laid out the case for Israeli businesses to sell to China.

“Israel has some products that are world-class,” said Johnson Liu, deputy director-general of the China Foreign Trade Center. “It has advantages in agriculture, hi-tech and green sectors, and the Chinese market has great demand for this, so we’re looking for exporters this time to come to the fair.”

Although China already imports significant amounts from Israel – in 2012 Israel sold $2.74 billion of goods to China – a considerable portion of that comes from just two companies. Sales by Intel accounted for a third of Israeli exports to China in 2012, while Israel Chemicals accounted for over 20 percent, according to Globes.

The new push for Israeli products is to help China fill the needs of its transforming economy. The government plans to urbanize 250 million of its rural inhabitants by 2025, a feat that the Chinese Academy of Social Sciences, a think tank, estimated would cost $106b. a year.

Fewer people working in agriculture creates a need for more efficient farming tools, while the growing multitudes of urban dwellers create demand for environmentally friendly technology to keep the notoriously smoggy country liveable. This year, for the first time, China is also sponsoring a special follow- up event to Canton Fair, focusing directly on green technology.

China’s growing middle class is an increasing market for consumer goods. Next week, for example, Apple is expected to unveil a cheaper version of the iPhone to sell to the growing market of Chinese consumers.

“The urbanization not only means the construction of cities and houses, but the demands of the equipment, transportation, and other supplies, and a great pooling power of domestic demand,” Liu said.

China’s turn to Israel as a market of innovation is part of a larger trend, as Canton Fair itself demonstrates. In 2007, it changed its full name from the Chinese Export Commodities Fair to the China Import and Export Fair.

“The market in Israel is not very large, but we pay great attention to how it can supplement China’s markets, to what we don’t have but you do,” Liu added.

Prime Minister Binyamin Netanyahu, who has cited Asian markets as a major engine of Israeli potential economic growth, visited the country in May and expressed hope that bilateral trade would increase 25%.

In July, Economy and Trade Minister Naftali Bennett laid out preliminary steps for negotiating a Free Trade Agreement with China, on his own visit to the Eastern giant.