Israel May Be Turning Away from Chinese Investment

July 19 2022

Last week, a joint venture between an Indian and an Israeli company won a bid for the rights to manage Haifa’s seaport. The nearby container port, by contrast, will still be managed by a China-based firm. Yet the new deal may suggest a move away from large-scale Chinese economic entanglement in the Jewish state, which has been a matter of concern for the U.S. for some time—not without reason. Sarah Zheng and Coco Liu report on other evidence that something has changed:

Before 2018, China had been positioning itself as an important international partner for the Israeli tech industry, which sought capital and access to one of the world’s biggest markets. Chinese investors were far from its most vital sources of capital—they invested $424 million in Israeli startups in 2018, about 5 precent of the total investment into the sector—but their connections to Israel were deepening.

In retrospect, that may have been the high-water mark. Last year, Chinese capital accounted for only 1 precent of investment in Israeli startups, data from the IVC Research Center show. This could be a strategic disadvantage for Beijing, which has been grappling with growing hostility from the West.

Companies in Israel that once welcomed Chinese financiers, particularly in sensitive deep-tech sectors, are now hesitant to do business with them because of the potential political consequences in other markets. Under pressure from its U.S. and European backers, one supplier of electric-vehicle components this year abandoned plans to take Chinese capital in exchange for access to the world’s biggest EV market, according to a person with knowledge of the matter.

In part, Israeli startups may be getting pickier because they find it easier to attract investors than they have in the past, says Ehud Levy, a general partner at Canaan Partners Israel and also a partner at China’s Lenovo Capital. And even if it hasn’t yet succeeded in getting Israel to adopt its entire policy agenda, the U.S. has convinced many Israeli entrepreneurs of the need to choose sides.

Read more at Bloomberg

More about: China, Israel-China relations, Israel-India relations, Israeli technology

Saudi Arabia Should Open Its Doors to Israeli—and Palestinian—Pilgrims

On the evening of June 26 the annual period of the Hajj begins, during which Muslims from all over the world visit Mecca and perform prescribed religious rituals. Because of the de-jure state of war between Saudi Arabia and the Jewish state, Israeli Muslim pilgrims—who usually number about 6,000—must take a circuitous (and often costly) route via a third country. The same is true for Palestinians. Mark Dubowitz and Tzvi Kahn, writing in the Saudi paper Arab News, urge Riyadh to reconsider its policy:

[I]f the kingdom now withholds consent for direct flights from Israel to Saudi Arabia, it would be a setback for those normalization efforts, not merely a continuation of the status quo. It is hard to see what the Saudis would gain from that.

One way to support the arrangement would be to include Palestinians in the deal. Israel might also consider earmarking its southern Ramon Airport for the flights. After all, Ramon is significantly closer to the kingdom than Ben-Gurion Airport, making for cheaper routes. Its seclusion from Israeli population centers would also help Israeli efforts to monitor outgoing passengers and incoming flights for security purposes.

A pilot program that ran between August and October proved promising, with dozens of Palestinians from the West Bank traveling back and forth from Ramon to Cyprus and Turkey. This program proceeded over the objections of the Palestinian Authority, which fears being sidelined by such accommodations. Jordan, too, has reason to be concerned about the loss of Palestinian passenger dinars at Amman’s airports.

But Palestinians deserve easier travel. Since Israel is willing to be magnanimous in this regard, Saudi Arabia can certainly follow suit by allowing Ramon to be the springboard for direct Hajj flights for Palestinian and Israeli Muslims alike. And that would be a net positive for efforts to normalize ties between [Jerusalem] and Riyadh.

Read more at Arab News

More about: Israel-Arab relations, Israeli Arabs, Palestinians, Saudi Arabia