Israeli companies target China_311.
(photo credit: Courtesy)
By the end of this year, Israeli companies could be preparing to manufacture
medical devices and electronic equipment for the Chinese market on a mass scale,
and those products would be stamped “made in China.”
That is the vision
laid out by Stone Shi, director of the Wujin Economic Zone (WEZ) in the eastern
province of Jiangsu, who met with The Jerusalem Post at a Manufacturers
Association of Israel conference in Tel Aviv on Monday.
It was only last
July that Israeli companies PTL Group and Elan Industries founded an industrial
incubator in Wujin to cater to Israeli hi-tech firms looking to get a foot in
the door in China. The Changzhou Industrial Incubation Initiative, a
13,000-square-meter area named for the city of 4.4 million people in which the
Wujin Economic Zone is located, is already home to three Israeli firms, and
agreements have been signed with another four.
But now the next two
phases of WEZ’s Israel project are already being planned: a 48,000-sq.-m.
factory zone for mass production scheduled to open in the middle of this year,
and an additional zone further down the track to house companies including
Jerusalem’s Kramer Electronics, which already have a China presence. The WEZ is
also planning to build facilities for the growing Israeli population, including
Shi said this was the right time for Israeli hi-tech
companies to enter China, as economic worries in the United States and Europe
threaten the flow of private investment to Israel, and as China’s domestic
market finds itself increasingly unable to keep up with the demands of its
approximately 1.3 billion consumers.
“Now is the time for China to find
more knowledge-intensive industries for our country,” and this is an area for
which Israel is famous, Shi said.
Chinese technology was still dominated
by labor-intensive industries that produce low-end products, he
There are six million new university graduates in China every
year, Shi said, and employing a university graduate in China would cost Israeli
firms roughly the same as it would to employ a construction worker.
added motivation for attracting Israeli companies to the region would be that
local industry could learn from their example, he said.
Shi praised the incubator model, in which innovative ideas considered too risky
for private investment are nurtured into viable start-ups capable of raising
money from the private sector and operating on their own. Chinese companies
still rely largely on government support, he said, and in the government sector
“we spend money, but we don’t ensure follow-up.”
manufacturers that do not open a production plant in China are only hurting
themselves, Israeli Consul to Shanghai Jackie Eldan said at the
“There are 300 million people in Chinese cities today and
another 300 million people about to move there,” he said. “This vacuum will not
stay open forever, but whoever enters the market now will stake a permanent
place for themselves there.”
Israel is fortunate to already enjoy a good
reputation among Chinese policy makers, Eldan said, adding that the last three
Jiangsu Communist Party secretaries had all visited Israel and that the current
secretary had instructed the Changzhou mayor to expand relations with
But there is still much work to be done to build the presence of
Israeli companies there, he said, because “at the end of the day, [the Chinese]
need to balance their own political interests.”