Chinese investors flock to Israel for investing summit

From providing kosher Chinese food to instantaneous translations of what people were saying in Hebrew, a recent investment summit in Tel Aviv did everything it could to make 450 Chinese investors feel comfortable in what was, for many, their first visit to Israel.

The China-Israel investment summit in September was titled Innonation, and attendees came ready to invest; even on the plane on the way over, a deal was signed to establish a $200 million fund to invest in Israeli medical technologies.

At Innonation, held Sept. 24-26, the Chinese investors were able to meet one on one with dozens of Israeli business representatives eagerly seeking their money. It was said to be the largest ever joint China-Israel conference.

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

Innonation summit in Tel Aviv photo/innonation

The September conference was a follow-up to one held in Beijing last January, sponsored by Infinity, a private equity fund backed by the China Development Bank and Clal Industries. At that conference, hundreds of Chinese investors met with representatives of 100 Israeli companies.

The recent conference brought many of those Chinese investors to Israel.

“The goal of the summit is to be the main mediator between Chinese investors and Israeli technology companies,” said Leora Jesselson of Infinity, which has offices in Tel Aviv, Beijing and 13 other Chinese cities as well as New York, Tokyo and London. “There’s a lot of money in China, and they are competing with the U.S. in buying technology.”

Israel is seen as a technology powerhouse, and many Chinese admire Israeli entrepreneurship, she said. There are already about 1,000 Israeli startups that boast Chinese investment or that manufacture in China. China recently bought a controlling interest in Tnuva, an iconic Israeli food company, and Ahava Dead Sea products, among other major investments.

Israel is a leader in industrial technologies, business leaders at the conference said, and China is the largest consumer market in the world. The summit hoped to make connections to help bring Israeli technologies to the consumer market.

It was 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, got in on the action too, forming a company called Phresh. Like many Israeli-Chinese collaborations, the Israelis provide the R&D, while the Chinese money helps bring it to market.

“We partnered with an Israeli agricultural company which created organic solutions to preserve specific types of fruit and vegetables,” said the younger Gal-Or.  “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 had its own television station, Innonation TV.

“We do interviews to boost Israeli companies in China,” said Lois Wang, marketing manager of Innonation TV. “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 at the summit, representatives of Israeli companies sat at small tables waiting for potential investors to drop by. Oleg Golobrodsky, of EcoTech, said he was there specifically to find Chinese investors.

“We are the only company in the world that has closed the loop on used tire recycling,” he said. “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 said, 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.

Jesselson said 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.