Sino-Israeli relations: Just do it!

China’s Ambassador Zhan Yongxin says the door is open for Israel to expand exports, but has some words of advice.

By
March 17, 2016 20:33
ZHAN YONGXIN: China attaches great importance to Israel.

ZHAN YONGXIN: China attaches great importance to Israel.. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

 
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Ambassador Zhan Yongxin has a message for Israelis who want do business in China. “Just do it,” says Zhan, borrowing the enormously successful late 1980s Nike branding slogan.

Much has been made of Israel’s pivot to Asia, and to China in particular, and while trade has grown in leaps and bounds since the two countries established diplomatic ties in 1992, the balance is tipped strongly in Beijing’s favor. In fact, while Israeli imports from China were up 5 percent last year, exports were actually down over 10%. While that figure perhaps reflects the slowdown in China’s economy, Zhan says Israeli business needs to be far more aggressive in pursuing trade ties.

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“We welcome Israel to expand exports to China and to find a way into China’s market,” the affable 59-year-old career diplomat, who arrived here just over a year ago after a spell at the foreign ministry in Beijing, tells The Jerusalem Post in his first interview with an Israeli media outlet.

“Jewish people have a pioneer spirit and Israeli businessmen should be more aggressive in exploring the Chinese market,” says Zhan, who again and again stresses the long and friendly relations between China and the Jewish people.

Jews first came to China via the Silk Road as early as the 8th Century, Zhan notes, where they settled in Kaifeng, becoming a prosperous community that, with no contact with the outside Jewish world, and no anti-Semitism, eventually assimilated among the surrounding Han Chinese. In later periods, Jews fled to China to escape czarist Russia and the Soviet Union, Baghdadi Jews settled in the foreign concessions in Hong Kong and Shanghai and during World War II thousands of Jewish refugees flocked to Shanghai.

“Chinese people are very friendly to Israel; they have no history of anti-Semitism. They would like to build up relations with Israel and to develop economic cooperation,” says Zhan, before asking: “Why are you afraid and nervous about doing business in China?” “Go there and explore the market,” he advises, make contacts with “Chinese people. In China relationships are very important.”

But while he says the door is open to Israelis to do business in China, there is a caveat. Israelis looking to do business in China need to be patient, and instead of looking for a fast deal they need to learn to first make good friends and then do business.

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The following are excerpts from the interview.

Israeli exports to China are still relatively modest, what do Israeli firms need to do to increase their market share in China?

Economic and trade cooperation is one of the main pillars of our relationship. Last year, the two-way trade volume reached $11.4 billion, with a year-on-year growth rate of 5%. In light of the global economic situation, these achievements are hard-won. China’s exports to Israel were $8.62b., up by 11.3%. China’s imports from Israel were $2.8b., down by 10.8%. Looking at these figures, China runs a trade surplus. But I have to point out that China has no intention to pursue a surplus. On the contrary, we welcome Israel to expand its exports to China and find ways into China’s market.

One way to increase the market share in China is to focus on what China needs the most. China has prevailed the outline of the 13th five-year plan on the 12th National People’s Congress. China’s gross domestic product will exceed $14.2 trillion in 2020. We are implementing an innovation-driven development strategy and promoting science and technology innovation, mass innovation and entrepreneurship, with supporting reforms and policies.

Israel has advanced technology, strong innovation and numerous start-ups, while China is famous for its manufacturing capacity and broad market. The two economies are highly complementary. There is a lot of potential to explore.

Will the slowdown in China’s economy have a negative impact on trade ties?

You should have faith in China’s economy. As the world’s second-largest economy, China’s economic performance is being closely watched and heatedly discussed.

What I want to emphasize, in particular, is that China’s economic growth remains strong and still operating within the proper ranges. As Chinese Premier Li Keqiang stated recently, in 2015 China was still one of the fastest-growing economies, with a growth rate of 6.9%, and it contributed 25% to global growth. The size of China’s economy is $10.4 trillion, the additional output from the 6.9% growth is equivalent to that of a middle-sized economy and higher than the additional value produced by the two-digit growth rate of previous years. China still provides a huge potential market for business people around the world, including of course from Israel.

We have seen massive investment by China in Israel. Why?

People talk about massive Chinese investment in Israel, but actually the figures tell another story; total investment, direct and indirect, totals $6b. For China this is not a massive investment.

To pursue benefits and development is the nature of business. We do see a growth in China’s investment in Israel. Up till now, China’s total investment in Israel has reached $6b., which only includes $210 million in direct investment. Meanwhile, China’s investment in Arab countries has reached $40b., mostly in the oil-producing countries, including more than $10b. in direct investment. By the end of 2015, the total amount of China’s investment overseas topped $1 trillion.

Chinese investment hasn’t changed the status quo of Israeli companies, whose management and function are the same as before. Chinese investment will bring more opportunities, and more benefits to Israeli people. By investing and cooperating with Israeli companies, China can help the Israeli companies maximize their values, explore the international market and speed up the industrialization of Israeli hi-tech.

What about Israeli investment in China?

Jewish people are well known for their wisdom and pioneering spirit but so far the investment made by Israel to China, a broad market with 1.3 billion people, is only $500m. It is much less than what Chinese entrepreneurs and investors have done in Israel. I sincerely hope Israeli entrepreneurs can seize the opportunity and summon up their courage to invest in China and thrive together with China’s development. Just do it!

What fields are Chinese companies interested in and where do you expect to see further investments?


As I mentioned before, Israel has advanced technology, strong innovation and numerous start-ups. Our two economies are highly complementary. As for specifics, it’s business and we do not intefere or comment. Let business be done in business ways.

How is Israel perceived in China?

“When it comes to clothing, people favor new ones; but when it comes to friends, people prefer old ones.” The Chinese people have a good impression of Jewish people. Both peoples value family and education. Both are hardworking and both like to make savings.

For Chinese people, Israel is a friendly country with small size but has strong strength and big influence. They are curious about Israel’s culture and history.

Actually, the relations of our two peoples can be dated back to many centuries ago. And during World War II, when the escape door of the Jews was closing, China sheltered more than 25,000 Jewish refugees in Shanghai.

There were also numerous Jewish friends who provided precious help and contributed hugely to China’s revolution, construction and reform, such as doctor Jakob Rosenfeld, who saved countless lives during the period of the Chinese people’s War of Resistance against Japanese aggression and the War of Liberation; Israel Epstein, the writer who introduced the bravery of the Chinese people in fighting against Japanese aggression to the whole world; Sidney Shapiro, the translator who actively promoted the cultural exchange between China and the world. The mutual support of our two peoples during the dark times is still the foundation consolidating our bilateral relations and friendship.

In April, Hainan Airlines will begin three direct weekly flights to Israel in addition to the existing El Al line. Do you imagine a big influx of Chinese tourists?  What will they be interested about in Israel?

More direct flights for sure are a good thing for people of the two countries to travel back and forth, especially for Chinese tourists to visit Israel. It is important to develop people- to-people exchanges.

Besides direct flights, there are other factors that affect the minds of tourists when choosing destinations, such as convenience, cost, security and so on. Israel’s history, religion and natural scenery are among the many attractions to Chinese. Last year, 47,000 Chinese visited Israel, while 120 million Chinese traveled abroad. So there’s a lot of potential for Israel to attract Chinese tourists.

How can Israel play a part in the One Belt, One Road project?

The Belt and Road Initiative [also known as the New Silk Road, a Chinese project to create land and maritime routes connecting the country with Europe via Asia and the Middle East – I.E.] is an important part of China’s open-up strategy with win-win cooperation. The aim of the initiative is to realize common development with relevant countries and also benefit for regional stability.

Since the initiative was advanced around two years ago, strong momentum has been gained. Over 60 countries and international organizations have expressed interest, and China has reached cooperation agreements with many of them. The Asian Infrastructure Investment Bank has been open for business; the Silk Road Fund has started implementing specific projects. And a number of major multilateral and bilateral projects are well under way.

Israel is a world-known “Start-up Nation.” It’s a leading country in terms of solar energy; telecommunication; energy efficiency; biochemical, agricultural and irrigation technology; and so on. Its hi-tech products and know-hows are quite competitive in the global market, which are also needed in building the Belt and Road.

Needless to say, finance and financial cooperation are an important pillar of the Initiative. That’s also where Israel can play its important role.

In the context of the One Belt, One Road project, can China be a stabilizing influence in the Middle East as a result of its heavy investment in that project in countries along the route that have conflicting interests?

The Middle East is a land of abundance, but unfortunately it is still plagued by war.

In Chinese culture, peace should be cherished and peace is a top priority. We believe all the countries of the Middle East should pursue the peaceful process, and secondly we should promote development, which is the foundation of stability. From this aspect the Belt and Road Initiaitive is of benefit to the Middle East.

It’s normal for countries to have conflicting interests, but one goal that I think is common for all countries is the pursuit of a better life, which can only be achieved through development. Turmoil in the Middle East stems from the lack of development, and the ultimate solution will depend on development itself. This is why we say the initiative is to the benefit of all the peoples along the route.

Israel and China reportedly signed a cooperation agreement with regard to the Eilat-Ashdod railway, yet nothing seems to have materialized. Are there any developments you can tell us about?

So far, I haven’t heard of any agreement signed with regard to that project. I read some articles in foreign magazines. China is building a port in Ashdod [the railway would connect to Ashdod and offer a land alternative to the Suez Canal – I.E.]. It is Israel’s interest to promote that project. One Belt, One Road is a vision. All of the projects are for the benefit of both sides, and I think it would be for the benefit of Israel and the benefit of China.

I think as long as it’s profitable, companies around the world would be interested in building it.

When President Mahmoud Abbas visited China in 2013, President Xi Jinping put forward a four-point peace proposal. Given China’s growing influence in the Middle East and its growing trade ties with all parties, could we see China become more involved in the peace process?

The Israel-Palestine issue is a long-standing hot spot issue. China believes that peace talks are the only way to resolve the conflict. Peace should be cherished. Peace is the top priority and the foundation of development.

China is highly attentive to the Israel-Palestine issue and has made continuous and constructive efforts to advance the Middle East peace process. In 2013, President Xi Jinping put forward four proposals on the Israel- Palestine issue. This January, President Xi visited the Middle East and reaffirmed China’s Middle East policy and called for focused efforts towards peace and development.

China is a firm supporter and sincere mediator for peace between Israel and Palestine.

We support the legitimate national rights of the Palestinian people. At the same time, we understand Israel’s legitimate security concerns. As a member of the UN Security Council, China will, together with the international community, play its part in pushing forward the Middle East peace process, and we call on both sides to resume negotiations.

The key to open the door to peace, though, is in your hands, Israelis and Palestinians. We hope you may resume dialogue.

After Prime Minister Benjamin Netanyahu’s visit to China in 2013, there were many initiatives discussed and working groups set up. What has happened to those initiatives? Did Netanyahu’s visit bring about any significant change?


High level visits have always been boosters for bilateral relations. After Prime Minister Netanyahu’s visit to China in 2013, two Chinese vice premiers, Madam Liu Yandong and Mr. Wang Yang, visited Israel.

As results of those visits, the China-Israel Intergovernmental Mechanism of Economic and Technological Cooperation and the China-Israel Joint Committee on Innovation Cooperation have been established, various working groups (high technology industry, agriculture technology, environment conservation, energy and finance) set up, a three-year action plan on innovation cooperation signed. Those mechanisms and working groups are just part of the fruits of the visits, and laid out the blueprint of future cooperation between the two sides. They will for sure further promote our relations.

The first and last Chinese president to visit Israel was Jiang Zemin in 2000. When can we expect the next visit?


As I just mentioned, frequent political exchanges and dynamic mutual visits take place at all levels. Last year, there were more than 40 vice minister and higher level Chinese delegations that visited Israel. I think this is a powerful demonstration that China attaches great importance to Israel and wishes to become your good friend and partner.

There is a Chinese saying that says “When water flows, a channel is formed.” Let us jointly look forward to it.

It is clear why Israel wants good ties with China. Why does China want to have closer ties with Israel?

China would like to establish and develop relations of friendship and cooperation with all the countries on the basis of the Five Principles of Peaceful Coexistence, namely mutual respect for territorial integrity and sovereignty, mutual nonaggression, noninterference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence.

Given the profound friendship between our two peoples, the highly complementary nature of our two economies, and the important roles we both play in the international community, there’s no reason for us not to get closer to each other. Our relationship will not only create more benefit to our two peoples, but also contribute to peace and development in the region and the world.

Have the business ties between Israel and China cost Beijing anything in its ties with the Arab and Muslim world?

We always take a fair, balanced and responsible attitude in handling China-Israel and China-Palestine, China-Arab relations. Benefiting from the good relations with both Israel and Palestine, China has been communicating with the two sides and playing a role of a mediator. For instance, the leaders of Israel and Palestine visited China in the same month. That’s not something you can always see. So, I think, the development of China-Israel relations is conducive for China to work on the two sides in a balanced way and push the peace process forward.

If the ties between the two countries are good and getting stronger, then why does China always vote against Israel in every international forum? Can we expect to see any change in China’s voting patterns?

In international affairs, China determines its position and policy by proceeding from the fundamental interests of the people of China and other countries and judging each case on its own merits, upholding fairness and justice.

Actually, both sides have good communication on multilateral issues. For example, when Israel applied to join the Committee on the Peaceful Uses of Outer Space last October, China voted for Israel. Last December, when Israel proposed a Resolution on Agricultural Technology for Sustainable Development in the UN General Assembly, China also voted for Israel. And China supported Israel’s membership in the newly founded Asian Infrastructure Investment Bank. It wasn’t easy as some members of the bank do not have diplomatic relations with Israel. China also appreciates the support rendered by the Israeli side on many occasions.

We have some difference of opinion, but we have good lines of communications.

Netanyahu said recently that we appreciate Europe but admire Asia. Do you feel that Israel is pivoting toward Asia? Should it?

Asia is the largest and most populous continent on our planet. It also accounts for one-third of the world economy. Asia is now one of the most dynamic regions with the most potential, and its global strategic importance has been rising. So it’s definitely a place worth Israel’s attention.

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