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Israeli business incubator launches in China

Posted By Abigail Klein Leichman On October 2, 2011 @ 12:00 am In | No Comments

Rapidly growing Israel-China link includes new industrial initiatives and a plan to teach Israel studies at Chinese universities.

The industrial park in Wujin, Changzhou, has two Israeli businesses and more to come.

“Israeli businessmen are clever, hardworking and serious — similar to Chinese businessmen,” says Eric Zhao, vice director of the investment promotion bureau of the Jiangsu Wujin Economic Zone (WEZ) in Changzhou, China.

Zhao was recently in Tel Aviv wooing a group of those very businessmen to invest in a new industrial incubator initiative for Israeli companies in China.

“We see that Israeli companies are not very large, but have high knowledge and strong growth potential,” he tells ISRAEL21c. “For example, yesterday we saw that in Israel they use GPS differently than in China. They add real-time information to communicate with other users. We would like to attract this type of project to China because the market is huge.”

Business, defense/security and academic alliances between tiny Israel and mammoth China are growing daily, helped along by private Israelis providing liaison packages.

The Changzhou Industrial Incubation Initiative is one of these. Zvi Shalgo, chairman of the Israeli Chamber of Commerce in Shanghai, founded the PTL Group in 2000 to offer Israeli companies — many of them exporting high-tech products — logistics, manpower and financial services to gain a foothold in China. It’s cheaper to do business in China than in the US, partly because 80 percent of the vast Chinese market is condensed around three major cities, requiring fewer point people.

Ninety projects later, PTL comprises seven separate enterprises of which the latest is the incubator. So far, it has two production lines running, Shalgo tells ISRAEL21c. One manufactures industrial coffee grinders; the other is LycoRed, a nutritional supplement manufacturer. Last month, an Israeli medical device company started building a factory in WEZ’s dedicated area for this type of industry.

Wujin, strategically located between Nanjing and Shanghai, is the strongest district in the Changzhou region, Zhao explains. Of Changzhou’s 80,000 businesses, 54 are branches of Fortune 500 companies. There are 25 universities, plus the massive Changzhou Science and Education Town, where tens of thousands of students study vocational skills needed in the industrial zone, such as welding and machining, IT and animation.

“The government has a new capital fund of $150 million to encourage foreign investment,” says Zhao. Tax breaks for the first few years, assistance in recruitment and patents, and even schooling and healthcare plans for foreign investors’ families are part of the draw.

Meeting in Tel Aviv, from left, Shai Givon of LycoRed Makhteshim Agan Group, Lu Qiuming of the Trade Zone Authority in Wujin, Changzhou and Zvi Shalgo, founder and CEO of PTL Group.

“Israel is an important partner to us,” stressed WEZ chairman Lu Qiuming. “We both have a long history and culture, and extensive cooperation in both official and non-governmental ways. WEZ is willing to [offer] preferential policies and excellent service to Israeli investors.”

Projects between China and Israel

In the past year alone, many major initiatives have begun between the two countries, which are 12 hours apart by air and established diplomatic relations in 1992.

Israel’s IDE Technologies is building China’s largest desalination plant in Tianjin. Communications processors by Israel’s Broadlight will be deployed in China Telecom Corporation’s fiber access services. ICL Fertilizers is selling Israeli potash to Chinese customers.

Gadot Biochemical Industries is building a new facility in China. Walkie-talkies made by China’s Southwest Integrated Circuit Design are using integrated circuits from Israel’s Tower Semiconductor. Hamizrach Auto is marketing pick-up trucks in Israel from China’s Great Wall Motor Company. Israel Aerospace Industries is competing to build executive jets with Aviation Industry Corporation of China.

On the academic front, the Herzliya Interdisciplinary Institute’s Center for Global Research in International Affairs recently hosted Chinese scholars on regional geopolitics, and Sichuan International Studies University (SISU) just launched China’s first-ever Israel studies program.

Carice Witte, executive director of Israel-based Sino-Israel Global Network and Academic Leadership (SIGNAL), innovated both these projects.

“There is little resource material about Israel in Chinese,” Witte tells ISRAEL21c. “This is one reason SIGNAL has developed the first academic website in Chinese about Israel and its people, from the introductory to the scholarly level. There are 10 Judaic studies centers in China, but no one has ever been trained to teach about Israel.”

SIGNAL provided scholarships for two SISU lecturers to train at Bar-Ilan University in Israel this fall, and three additional Israel studies programs are in the planning stages at other Chinese universities.

“Business opened the door for broader relations between China and Israel,” says Witte. Over the past five years, Israel has developed a strong brand in China for agricultural technology in particular, and has come to be seen as a provider of solutions to many relevant issues in science and technology.”

“There’s a strong synergy between them,” she adds, “since a lot of academic innovation ends up in business, and business contributes to inspiration for academic excellence in several disciplines. Creating an academic framework for scholars from both nations to share ideas can lead to creative solutions for pressing concerns for both sides.”


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