Israel and China – bridging the two ends of Asia

As Israel celebrates 25 years of diplomatic relations with China, it can be proud of its achievements.

By ALEXANDER B. PEVZNER
China Israel flags (photo credit: INGIMAGE)
China Israel flags
(photo credit: INGIMAGE)
On January 24, Israel and the People’s Republic of China will celebrate 25 years since the establishment of diplomatic relations.
Celebration is the correct word here because while 25 years is not a long time, the two sides have so far made impressive progress in building a bridge across the two edges of Asia, and have much to look forward to.
The two countries have developed flourishing exchanges in all aspects of bilateral relations, including trade, tourism, culture, the academy, political and strategic dialogue. Chinese studies in Israel are prospering and tourism is booming, so much so that there is huge demand for Chinese language teachers, and an actual shortfall in tour guides that can speak Chinese.
While Israel and China are two of the world’s longest continuous civilizations, sharing unique common characteristics, and Jews have enjoyed peaceful life in China since at least the 12th century, relations in the modern era have faced numerous obstacles before developing fully. These obstacles included the Cold War, interference by third parties, and objective difficulties.
Israel recognized the People’s Republic of China (PRC) on January 9, 1950, the first country in the Middle East (and the seventh in the non-Communist world) to do so. However, China reciprocated only in 1992 with the establishment of full diplomatic relations.
While Jews and Chinese share a strong focus on education and family and there was never antisemitism in China, the different political systems and the fact that Israel and China found themselves in opposing camps during the Cold War make the success of the current roaring ties nothing short of spectacular.
In fact, China has already become Israel’s favorite partner in numerous areas. It is worth mentioning two examples: trade and infrastructure, and tourism. China, the world’s second largest economy in nominal terms and largest as measured by purchasing power parity, has naturally emerged as Israel’s largest trade partner in Asia and the third-largest overall.
Bilateral trade has been growing steadily in recent years, reaching $11 billion. In fact, Israel has six trade representatives in its trade offices across China, more than in the US. Also, last year the two sides agreed to begin freetrade agreement negotiations. While it will take several years to conclude, the FTA will not only boost trade but also advance cooperation in other areas. Chinese firms are also actively participating in infrastructure projects across Israel, including building a new harbor in Ashdod and taking part in the light rail project in Tel Aviv.
But China is much more than simply a trade destination. As Chinese economy grows and develops, China has also become an investor in the Israeli high-tech sector and as such, a provider of jobs for Israelis. In 2015, nearly 40% of funds raised by Israeli venture capital (VC) firms came from China. Chinese investment funds also directly invested $500 million in Israeli start-ups in 2015. Realizing this trend, some Israeli start-ups have begun devising a market strategy aimed specifically at China. Israel and China are natural partners in the area of innovation and several Chinese firms followed Western multinationals by setting up R&D centers in Israel.
Further, China’s vision of the One Belt One Road (OBOR) initiative to more closely connect Asia and Europe through a network of overland and maritime links provides Israel with a unique opportunity not only to participate in projects across Asia, but also to sit at the table with countries with which Israel doesn’t have diplomatic relations. That is one reason why Israel decided to become a founding member in the Asian Infrastructure Investment Bank (AIIB), a vehicle China created to fund projects in the OBOR.
In tourism, growth has exceeded expectations with the launching of new direct flights to Beijing by Hainan Airlines. This year, Israel expects to launch the long-awaited direct flight to Shanghai, while Cathay Pacific will begin flights from its Hong Kong hub in March. Further growth in incoming tourism will also be aided by the 10-year multiple-entry visa that started in November.
Prime Minister Benjamin Netanyahu helped jump-start the bilateral relationship during his visit to China in May 2013, the first visit by an Israeli prime minister since 2007. Following that visit, no less than six Chinese Politburo members have visited Israel since October 2013, the most recent being the visit of Zhang Dejiang in September of last year. Zhang, ranking number three on the Standing Committee of the Politburo and speaker of the Chinese Parliament, was the most senior Chinese leader to visit Israel in 16 years, testifying to the importance with which the Chinese view the relationship with Israel. Israel’s political dialogue with China was upgraded in 2014 to deputy minister of foreign affairs level, to be held twice a year.
The dialogue includes strategic and consular affairs, and even terrorism.
Still, like any other bilateral relationship, the ties are not without challenges.
The first main challenge is the rapid changes across the Middle East which present both sides with dilemmas.
The second, even more serious one, is the uncertainty surrounding the future of US-China ties following the election of Donald Trump as president of the USA. The prospect of a trade war between the world’s two largest economies amid an already shaky global economy is an unsettling one, and there will be only losers in such a standoff.
Let us hope that relations between Israel and China will continue to flourish. After so much has been accomplished in only 25 years, imagine what the next 25 years could bring.
The author is founding director of The Chinese Media Center (CMC) at the School of Media Studies of The College of Management Academic Studies, Rishon LeZion, and a senior adviser to the Silk Road Group.