Sun, Feb 03, 2019 - Page 7 News List

Trump’s freeze on China exposes Israeli tech firms to a chill

As Chinese investment in Israel surges amid US trade tensions, Beijing warns against interference from any ‘third party’

By Gwen Ackerman and Ivan Levingston  /  Bloomberg

Barlev aims to push the legislation through the Israeli Knesset, or parliament, after the elections.

Netanyahu, running a campaign amid concern that Israeli Attorney General Avishai Mandelblit could recommend his indictment on alleged corruption charges at any moment, has thus far refrained from public comment on US-China trade tensions, or on the consequent pressure on Israel to reconsider how it does trade with China.

However, recent developments have not gone unnoticed in Beijing.

China has asked Israel for clarification over a series of statements, including that of, NewsIsrael13 reported last week.

The prime minister’s office and the Israeli Ministry of Foreign Affairs declined to comment.

“Regarding China and Israel, our trade is, in essence, win-win cooperation between two independent sovereign states,” Chinese Ambassador to Israel Zhan Yongxin (詹永新) said by e-mail. “It should not be interfered with by a third party.”

The US might have competitive reasons to try to curb Israel’s burgeoning ties with China, and in any case, so far there is little change on the ground.

Regardless, the tensions are swinging Israeli attitudes toward China from open embrace to wariness, said Yair Geva, head of the high-tech department at the Herzog, Fox and Neeman law firm in Tel Aviv.

“I’ve definitely seen cases recently where Israeli tech companies decided not to pursue investments from China, because they felt this could jeopardize their US activities, or because their US-based shareholders were concerned about engaging with Chinese institutions,” Geva said.

The overall stakes might not be that high. Of the US$685 million raised by Israeli technology firms in the third quarter of last year, only US$174 million, or 25 percent, was from China, IVC Research Center said.

“The Chinese role in Israeli tech is way overblown,” Bessemer Venture Partners Adam Fisher said. “It hasn’t put a dent in the market and if it disappeared, it wouldn’t affect the Israeli high-tech economy.”

Still, the lure of the vast Asian market is strong and China is simply too big to ignore — even as the US warns allies of potential pitfalls.

Jon Medved, CEO of the crowdfunding investment platform OurCrowd, expects 1,000 Chinese participants at his annual conference in Jerusalem in March.

“There is a real story here about Israel opening up to the east, and it can’t be stopped,” Medved said.

“How we manage these newly found friendships without disturbing our core relationship with the US is going to require fancy footwork,” Medved added.

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