Israeli businesses look East to offset weak Western markets

Invest Honk Kong chief says “We want to reach out to Israel’s hi-tech center and assist Israeli companies."

Hong Kong skyline 311 (photo credit: Courtesy)
Hong Kong skyline 311
(photo credit: Courtesy)
Israeli businesses are showing a strong interest in technology investment opportunities in Hong Kong and mainland China to expand trade, as export markets in Europe and the US weaken.
“More than ever, as Israel’s largest markets in the US and Europe falter, we are starting to see a growing interest by Israeli companies to shift parts of their business and investment to east Asia,” said Simon Galpin, director-general of Invest Honk Kong, in an interview with The Jerusalem Post at the end of last week in Tel Aviv.
“We want to reach out to Israel’s hi-tech center and assist Israeli companies, in particular small and mediumsized companies when going global, mostly in the areas of green technologies and solar power.”
InvestHK is the department of the Hong Kong Special Administrative Region (HKSAR) responsible for foreign direct investment. The department helps overseas, mainland and Taiwanese businesses set up and expand in Hong Kong.
During a visit to Israel at the end of last week, Galpin, who was heading a business delegation to advance Israeli investments, said Hong Kong is keen for Israeli companies to open local or regional offices there.
Galpin addressed a seminar in Tel Aviv on Thursday, which was co-organized by InvestHK and the Guangzhou Bureau of Foreign Trade and Economic Co-operation (BOFTEC), and focused on investment opportunities in the innovation and technology sectors in these regions. The seminar was attended by 260 Israeli business executives.
“We see tremendous potential for two-way trade. Hong Kong has become a major center for management of supply chains, information, coordination, finance and professional services,” said Galpin.
“For Israeli firms, Hong Kong is a key platform for doing business in Asia, especially in China, which is seeking to upgrade factories for which Israelis can offer much of their technologies.”
Hong Kong is Israel’s most important trading partner in East Asia, and Israel is Hong Kong’s second largest export market in the Middle East. In 2009, bilateral trade between the two markets reached around $2.6 billion.
Import items from Israel include diamonds, pearls, semi-precious stones, precious gems, optical products and telecommunications equipment.
More than 100 Israeli companies already operate in Hong Kong, including Nice Systems, Rad Vision, Amcor Ltd., and Zim Integrated Shipping Services.
“Everyone understands today that Asia is a solution to declining sales in other markets and will be the main target in coming years,” said Yosef Shachak, InvestHK’s representative in Israel and former president of Israel’s Public Accounting Institute.
Asked about whether recent political and diplomatic tensions could have an impact on business with Israelis, Galpin said that in Hong Kong, business and politics are kept separate and that there are no signs that the situation in the Middle East has a bearing on working with Israeli firms today or in the future.
“Hong Kong is not a political city. In Hong Kong the only religion is business,” said Galpin.
During last year’s global economic slowdown, Israeli trade with China shrank 17 percent to $4.56b. compared with 2008, according to figures from Israel’s Industry, Trade and Labor Ministry.
Israel and China established diplomatic relations in 1992.
Israel’s biggest exports to China are agricultural technology and electronics, and its major imports from the country are machinery and textiles.
At the beginning of May, Finance Minister Yuval Steinitz, who visited Hong Kong at the start of a weeklong trip designed to expand trade with China, called Israeli businesses to look to the East, in particular China, as a way to sustain strong economic growth rates.
Bloomberg contributed to this report