Israeli companies target China

Israeli companies would manufacture medical devices and electronic equipment for Chinese market.

Israeli companies target China_311 (photo credit: Courtesy)
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 synagogues.
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 added.
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.
An added motivation for attracting Israeli companies to the region would be that local industry could learn from their example, he said.
In particular, 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.”

Large Israeli manufacturers that do not open a production plant in China are only hurting themselves, Israeli Consul to Shanghai Jackie Eldan said at the conference.
“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 Israel.
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.”