Chinese Investment in Israeli companies is increasing annually, with this year’s exit and investment total nearing 1.7B USD from the private sector alone. Chinese government investment, currently a part of the “one belt one road” policy, is close to 12B USD in expenditures, and China’s 13th five year plan has stated that innovation in general, and a switch from “made in china” to “created in china”, are a key component to the Middle Kingdom’s economic growth. China, without a doubt, likes investing in Israel.
Having an overall growth in investments for the Israeli market is great, but just like with the Moon landing, we are dealing with a giant with endless possibilities and new “gravity laws”. Here are 3 basic laws to think about before ascending to the new world of Chinese investments.
Know the terrain you’re planning to land on
- The Chinese economy is a hybrid between free and planned markets, that follow the government “solar winds of change”.
- Use as much information as you can to understand what the conditions are for YOUR SPECIFIC COMPANY.
- Have an Agtech company aimed to reduce water use for farmers in China’s mid-western areas? Great, because that’s a major strategy of the PRC and it’s “Go west” policy.
- Thought about creating a new social network that includes phone payments? Think carefully, because you might get some resistance and lack of cooperation if the company contradicts the country’s aim to keep major social networks “In house”.
- The point is – use whatever knowledge you can, to see how your company fits the country’s markets and interests. That means – five year plans, specific market conditions and infrastructure for a specific geographical area you’re looking to “land on”.
Familiarize yourself with the obstacles ahead
6. Chinese investments vary by millions of dollars, pending time, area of expertise, and size.
7. Israeli medtech received more than 80 million dollars in funds, yet navigation barely halved this amount. This obviously changes between companies as well.
8. Last year the XIO group Acquired a massive $510M for a single company, Baidu invested $38M in Israel, yet Alibaba Almost doubled it with $68M. Both companies’ investments went on Big data.
9. The old phrase “Actions represent priorities” could definitely help you understand what the Chinese interests are as hole for the specific company you’re dealing with today.
Use experts when needed
10. With all the general enthusiasm and massive support from both nations to rapidly increase investments and cooperation, the Chinese culture is still very different from the Israeli one. While directness, improvisation and risk taking is what helps create this amazing ecosystem, Chinese overall culture, native language, manners etc’, varies between provinces, companies and cities.
11. The fact that different companies come from “China” doesn’t mean you can assume the same English level, manners, and even Sales pitch.
12. Get translators, advisors and people with proven experience and connections, to help you understand what stands ahead of you. Save time, money, misunderstandings and embarrassment for both sides.
– – –