China may be the ideal hub for transforming Israeli ideas in the renewable
energy and water sectors into globally marketable, environmentally sustainable
As Israeli entrepreneurs and researchers in these fields
continue to develop new types of green products, China is becoming an
increasingly fitting partner for mass-producing and internationally promoting
these innovations, experts say.
For China, where 70 percent of water is
used for agriculture and 90% of waterways have become polluted, “energy, water
and waste are cornerstones of a sustainable future in China” and are areas in
which Israel can be a great asset, according to Peggy Liu, chairwoman of the
Joint US-China Collaboration on Clean Energy (JUCCCE), a nonprofit focused on
accelerating China’s greening process.
“The central and local government
are actively seeking international technologies and best practice partnerships
to boost their capability on the ground,” Liu told The Jerusalem Post. “Israel
is known to China and the world as a leader in water technologies so it makes
common sense for both to partner in piloting new technologies and scale up for
Liu’s organization recently featured Israel as one of
seven countries attending their November China Energy Forum in Chengdu, in which
all of the countries involved discussed potential collaboration opportunities in
“Israel has an excellent reputation in China as a
‘startup nation’ for hi-tech technologies,” agreed Dr. Richard Hardiman, a
fellow at the Harry S. Truman Research Institute for the Advancement of Peace,
visiting scientist at the Weizmann Institute of Science, senior lecturer at the
Hebrew University and board member at the Jerusalem-based Israel-Asia
While China is clearly interested in developing Israeli
technologies, however, some of the cuttingedge products in Israel’s renewable
energy sector are still in their early evolutionary stages and could pose
challenges to investors, Hardiman cautioned.
“They like to grab new
ideas, but whether to take them at that early stage of development is yet to be
seen,” he said.
Today, within the renewable energy and water sector,
water is probably the optimal route for Israeli innovators to take with China,
as the solar industry there is nearly bankrupt – despite the fact that it
produces the majority of the world’s solar panels, according to Hardiman.
Hydroelectric power also remains a particularly strong industry in China, as
does wind power, which has overtaken the United States in terms of installed
capacity, he said.
Much of the improved relations between Israel and
China are due to the concerted effort of the Foreign Ministry to open its doors
to business in China in recent years, as well as the decision by businesses to
look eastward following the 2008 economic crisis, according to Carice Witte,
founder and executive director of Sino-Israel Global Network & Academic
“The technology development relationship is similar
to the trajectory you’ve seen in all areas of China’s relations in the past
year,” Witte said. “Relations overall have taken a sharp
Witte also attributes China’s increased interest in Israel to
the Arab Spring, the resultant investment losses – particularly in Libya – by
which the Chinese were “taken aback.”
“They’re a non-denominational
solution-seeker,” Witte said.
A joint Israeli and Chinese team is
currently in the process of erecting a huge Sino-Israeli International Water
Industrial Park in southern China’s Guangdong Province. The $200 million
facility, which will encompass about 400,000 square meters of research and
exhibition space in the manufacturing city of Dangguan, will be managed jointly
by Chinese company Dowell Technological & Environment Co. and Ness
Ziona-based Shirat Enterprises.
The partners have already signed
memorandums of understanding with 10 Israeli companies, and are in discussions
with about 30, according to Shirat president Eliezer Manor.
“We are fully
aware how hard it can be for Israeli companies to penetrate China market,” said
Huangeng Pan, chairman of Dowell Technological & Environment Co., in a
statement released by his office, after a visit to Israel during which he met
with Industry, Trade and Labor Minister Shalom Simhon.
will help “cut Chinese red tape” and also give Israeli companies the means to
get the global exposure necessary for marketing their products, Pan
“The fact is that Israel hi-tech companies must go outside of
Israel. Israel is not an industrial market,” Manor told the Post. “China is
exactly the opposite of Israel – China has many more industrial
Victor Zhao, Shirat’s China-based director, agreed that
the relationship would certainly be “mutually beneficial.”
facing very problematic issues with water shortages and pollution and Israel, on
the other side, has great technologies but not a great market,” Zhao told the
Post at November’s WATEC water technologies exhibition in Tel Aviv.
the WATEC convention, China was the most highly represented country, sending 24
groups with more than 200 people representing over 130 firms, research
institutes and government offices, according to the Industry, Trade and Labor
The large number of Chinese participants coincides with an
increase in trade with the Asian partner, which amounted to $6.8 billion in
2010, a jump of 49% from the previous year, said the ministry, which also signed
an agreement of cooperation on water issues with the city of Tianjin during
As far as the Water Industrial Park goes, the funds will be coming
from Chinese governmental grants of $6m. per year, investment funding of $18m.
per year and about $36m. in private sector capital raised each year, according
to the companies.
Meanwhile, Shirat has also become involved with another
project in the central Chinese city Wuhan, where it has partnered with the local
investment fund AgriGroup to bring in new agricultural water technologies from
“The only way for [China] to keep growing their technology is the
introduction of new products into their markets,” Manor said.
the water sector, IsCham Beijing (the Israel Chamber of Commerce in China’s
Beijing branch) has proposed establishing an Israeli commercial demonstration
center either in Beijing or in Tianjin, which would house permanent and
revolving exhibitions as well as courses in water technologies, according to
IsCham Beijing general manager Fani Gurevich.
Such a demonstration center
would target Chinese government officials, field specialists and potential
clients, using a model that Israel has already employed in other parts of China
and all over the world. The center would “answer challenges” that Israeli water
companies face in China, as well as recycle and purify waste and/or seawater
from the nearby area, Gurevich said. Among the currently successful Israeli demo
centers in China are a dairy farm near Beijing operating since 2001 and agricultural centers in
the Xinjiang province and in Beijing, she explained.
“I think we’ll start
seeing more and more such collaborative projects with innovative structuring,
for example where the Chinese government provides funding and other nations
contribute expertise to build centers for technology R&D,” said Manuela
Zoninsein, the China Dream Project Director at JUCCCE and a columnist for
IsraelStrategist.com covering cleantech exchange between Israel and
“Whatever is produced is jointly owned, with both sides equally
contributing and equally gaining: China’s government is implicated in protecting
the intellectual property it owns and the foreign nation gains funding and,
potentially, access to this massive market,” she added.
Water Industrial Park, however, Zoninsein said she was concerned as to whether
both sides would be contributing equally and feared that Israeli companies might
be “providing the piece that is of greater value.”
In doing so, they
could risk losing control of their own innovative technologies due to prevalent
intellectual property infringement.
“It is hard to say whether Israeli
companies will retain their cutting- edge position in clean technologies,” she
This is a concern that Hardiman has also voiced, noting that there
have been long-time hesitancies, or “cold feet,” about cooperating with China in
such ways because it is “renowned for copying.” He suggested that Israeli
renewable energy and water companies follow the footsteps of some American firms
that have had the Chinese National Development and Reform Commission (NRDC)
stand in as an official state guarantor when they sign contracts.
Manor at Shirat, the international property issue is no longer a serious concern
and he argued that the Chinese firms “need” the Israeli companies to develop the
products and cannot simply embezzle knowledge.
“All our activities in
China are somehow related to the local authorities and they do not allow
[companies] to easily to steal know-how because they know that if this happened
it would hurt their own activities,” Manor said. “China is undergoing a process
of taking care of this issue much more properly.”
While Gurevich from
IsCham Beijing stressed that there is, in fact, a substantial risk, she pointed
out that many companies are able to operate in China without any
In order to succeed in the Chinese renewable and water sectors,
however, Witte from SIGNAL emphasized just how crucial it is for Israelis to
better familiarize themselves with Chinese customs.
“If you understand
Chinese culture you will know how to address the issues of property rights and
will know how to succeed,” said Witte, whose organization recently established
the Center for Contemporary Sino-Israel Studies (CCSIS), the first-ever Chinese
research center addressing China- Israel comparative politics and strategic
analysis, at Shanghai Jiao Tong University.
“The Chinese hold the Jewish
people as a whole in high esteem and they perceive us as a unique people who
have made an unusually – proportionally – large contribution to society,” she