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Chinese Companies Eager to Invest in Israel

Innonation Summit brings hundreds of Chinese investors

Tel Aviv, Israel – From kosher Chinese food to simultaneous translation, Innonation, the China-Israel Investment Summit, did everything it could to make the 450 Chinese investors feel comfortable in what is, for many, their first visit to Israel.

They came ready to invest, and even on the plane on the way over, signed a deal to establish a $200 million fund to invest in Israeli medical technologies. At Innonation, they were able to meet one on one with dozens of Israeli business representatives.

“We are looking for investment opportunities in Israel and we will help them in development and marketing,” Liu Hao Peng, of New Alliance, a Shanghai based investment fund told The Media Line. “We aim to help them settle down in China and to manufacture their product in China.”

This conference is a follow-up to one in Beijing in January of this year, where sponsored by Infinity, a private equity fund backed by the China Development Bank and Clal Industries. At that conference, hundreds of Chinese investors met representatives of 100 Israeli companies.

This conference brought many of the Chinese investors to Israel.

“The goal of the summit is to be the main mediator between Chinese investors and Israeli technology companies,” Leora Jesselson of Infinity told The Media Line. “There’s a lot of money in China, and they are competing with the US in buying technology.”

Israel is seen as a technology powerhouse, and many Chinese admire Israeli entrepreneurship, she said. There are already about 1000 Israeli start-ups that have some Chinese investment or that manufacture in China. China has also recently bought a controlling interest in Tnuva, an iconic Israeli food company, and Ahava Dead Sea products.

Israel is a leader in industrial technologies, businessmen here say, and China is the largest consumer market in the world. The summit hopes to make connections to bring Israeli technologies to the consumer market. It is organized by Amir Gal-Or, a serial entrepreneur and the founder of Infinity, who has lived for the past 16 years in China.

Amir’s son Amit, 20, a student at NYU-Shanghai, had gotten in on the action, forming a company called Phresh.

“We partnered with an Israeli agricultural company which created organic solutions to preserve specific types of fruit and vegetables,” Gal-Or told The Media Line. “So they had a product for grapes, another for potatoes, and one for strawberries. We combined all of these so it’s like a cocktail of a single solution that kills a wide variety of bacteria in your refrigerator.”
The product can extend the shelf-life of fruits and vegetables by several weeks, he says.

The summit even has its own TV station, Innonation TV.

“We do interviews to boost Israeli companies in China,” Lois Wang, marketing manager of Innonation TV told The Media Line. “If an Israeli start-up wants to come to the Chinese market, we can interview them and they can explain their business plan, and what kind of partner they are looking for. It is then broadcast on our website.”

In one of the rooms of the summit, representatives of Israeli companies sit at small square tables waiting for potential investors to drop by. Oleg Golobrodsky, of EcoTech, wants to find Chinese investors.

“We are the only company in the world that has closed the loop on used tire recycling,” he told The Media Line. “We can take any kind of used tires and turn it back into synthetic rubber. People can use our rubber the same way they would use any other product.”

China, he says, imports huge amounts of rubber. He said several Chinese investors have already expressed interest in his product.

While China is intensely interested in Israeli companies, their corporate cultures are very different, which can create misunderstandings. Leora Jesselson of Infinity says that Israeli entrepreneurs can be impatient, wanting to close a deal immediately, while Chinese investors often want the Israelis to visit several times.

Failure is also seen very differently. In Israel, there is no stigma to failing, and many of the most successful companies came after repeated failures. In China, failure is considered an embarrassment, and some Chinese investors are afraid to take risks, fearing they will fail.