Israel-Asia Center

Israel-Asia Center: After serving as a diplomat in Hong Kong, China, why did you decide to make a second career there?

When I was in Hong Kong, it struck me that China is Israel's future. Not that the U.S. and Europe need to be discarded or put aside, not at all, but, the innovation that's happening in China, the fantastic opportunities, the sheer start-up feeling of it all brings up more opportunities in which we can play a more substantial role.

It was very clear to me that Israeli companies, Israeli technology, Israeli people and experts need to play a more significant role in China. And I have no doubt that the Chinese are also willing and are looking for such cooperation. And, in general, a cooperation between Israelis and Chinese can be a much easier relationship. Even though there are the cultural boundaries, the overall pragmatism of both nations, overall entrepreneurial spirit, the 'hardworkingness' of both cultures and very simple moral values are something that builds very important connections between us that allow us to work together in a much more natural way than between the Chinese and other cultures.
 
The second reason I decided to continue working with China is that [the Chinese] brought out a spark in me, and I really admire them. I enjoy being in China, I enjoy the food and the people, and so half of it is personal inclination.

IAC: How does the investment model work between Israeli and Chinese companies?

[In the case of CIVC], it's difficult to say now after five years together, but I can tell you that each side brings its experience, its understanding, its values, and together we make a cohesive team, with the diversity of thoughts and ways of thinking that makes for better investment. And we are always happy to learn. But if one of the Chinese companies of ours is in need of technology, then the first place we look is in Israel, to look for some kind synergy, because there is a lot of technology in Israel. There's much under-utilized technology in terms of market, and in China there's much market without a lot of technology, and I think that whenever we can, we take into account this factor.

IAC: Does Israel attract any investment from China?
That's a tricky question because the first thing is that the Chinese and Chinese investment firms all understand that the opportunities are in China. So they don't naturally look for investments out of China because there's no need, and they understand that there's a lot of money to be made in China and it would be a waste of their time and resources to look outside.
 
Saying that, some of the Chinese today are investing abroad, and there are more and more investments abroad. But they invest more in brand names and things that are well known, and because Israel is such a small market, it doesn't attract too many opportunities such as those. But I do believe that in the long run, those Chinese investors that are looking for technology will find their way to Israel because we have a lot to offer.
 
Another issue here is that the Chinese in business are willing to take risks. Usually in R&D, they are less inclined to take risks, and that's why we aren't on the same page yet, so when they come to the page where they'll be more inclined to take risks on technology, that's the time they'll come to Israel.

IAC: Has the relationship been hit at all by the world recession?

No. I see the economic crisis as I see other trends, so I don't put much emphasis on any given moment. Now the economic crisis has been barely felt in China. I think its been contained and there won't be any long-term affects.

IAC: How interested are both sides in clean tech and green investments?

I think they are very interested. China built itself initially on manufacturing, which hurt Chinese environmental resources, and I think that era has ended. Everyone [in China] understands that it has to minimize pollution, and create a better environment for its people. I am positive that the Chinese officials in government not only write about the strong need in clean tech but stand very strongly behind it. It's not just words. I'm positive that they're very very serious about it and that they plan to implement the policies they've put in place. It's a matter of survival, and I think the Chinese government acknowledges that.

IAC: Does Israel's small size work against it when dealing with China?

No. Actually, I think that it works for us. we've always been small, so we've always understood that we need to be pragmatic, and in the end, it's people working with people. The fact that we're small means we're more determined, more out there, pushing and taking risks. I don't think that China will see Israel as a substantial market, but other than that, size is not an issue.

IAC: How do you see the business relationship between Israel and China developing over the next ten years?

I think that the Israelis have to understand that China works in long-term relations. Any seed we put in today will be much bigger in ten years from now. I see the relationship flourishing because I think Israel has a lot to offer China and China has a lot to offer Israel. Our technology, and that the fact that we keep ourselves a bit above the trends and have an innovative edge, and I think that as long as that's true, we'll always be of interest to the Chinese. Also our way of thinking. I think the Chinese, although they're very pragmatic and have an entrepreneurial spirit, they're always happy to look at our out of the box thinking.

They have a gigantic market in which only they know how to work in, and we must understand that we have to look to them to understand how to work in this market, and we can't for one moment think that we know how to work in that market on our own. And because they're becoming more and more influential, this will be true for all of Asia - that it will be easier to work through China in Asia, as they are becoming strong partners globally, not just regionally.
 
IAC: What challenges do you envision along that path?

I think that if we come with an attitude of mutual respect, that's the most important factor that will help us in any relationship. I think the issue of mutual respect is something that always needs to be nurtured.