A few weeks ago I wrote a post about the Israel-China investment future. This was right before a week full of events I attended.
When invited by Sino-Israel Global Network & Academic Leadership (SIGNAL) to sit at a roundtable on Israel’s China policy, I frankly didn’t really know what to expect. As a fast-paced entrepreneur, dealing with something like policy seemed like a slow thing that would take ages to change and would belong to my parents’ generation. Something belonging to the “old world” with the “old order”.
Well, here’s a surprise: “policy” and “strategy” are fast-changing, relevant words for today’s world. Perhaps not as fast as sending a WeChat message but still, you feel the move and you feel the excitement when discussing them. Why? Because discussions over such issues can move mountains when they reach the right ears.
One of the main questions I’ve been asking myself, which also came up in the discussion several times is this: is Israel really important to China?
We see endless delegations going in and out of Israel for business, investments and academic exchange purposes, but perhaps Israel is just a commodity to be consumed like any other country wanting to do successful business with a rising superpower.
I don’t have an answer to that. But if the answer is, “Yes, Israel is a commodity,” then there should be a discussion of how to handle this reality, how to leverage the assets Israel already has and keep Israel’s competitive advantage over other countries.
In 2013, Beijing proposed the Belt and Road initiative (also called: One Belt, One Road or OBOR in short; 一带一路 in Chinese). This initiative spans a wide area, starting from Southeast Asia going through China, Central Asia, Russia, parts of Europe, the Middle East and Eastern Africa. It will essentially create greater trade, better infrastructure and cooperation between countries (about 60 of them) in these regions.
Now, in my opinion Israel has two main and unique leverages it can use to its advantage (and there are other advantages I won’t discuss here):
1. Stability: Israel is at a main junction of the Belt And Road; geographically it’s located towards Europe and towards East Africa. Currently, Israel is the most stable country in the region, which is exactly what China needs to go on with this initiative. Israel should maintain the stability as much as possible–this is what keeps it attractive.
2. Innovation: Eventually, almost every country in the world wants to have the best relationship with a superpower, both economically and politically. Out of all the countries on OBOR, Israel is the most known for innovation. In China, the first place investors and entrepreneurs look to for innovation is Silicon Valley. Israel comes in second place. Because Silicon Valley is not part of the OBOR area, Israel should use its innovation as leverage to attract China’s attention.
I’d say you can look at these two points as layers built one on top of the other where the whole is larger than the sum. You’ve got stability as a base, and innovation and cutting edge technology on top. Israel should make an effort to keep that competitive advantage. Innovation is not something you own but something you create. It is an ongoing process and takes hard work to stay on top. Since other places have great innovation as well, Israel needs to keep investing in this field to maintain its advantages. There’s also the branding aspect: innovation is good branding that should be kept.
If Israel were to lose that top layer of innovation, it would then only be a stabilizing power in the Middle East. Is that enough to attract China’s attention and maintain the excellent relationship Israel now has? Perhaps. But adding innovation is a power multiplier that Israel should keep investing in.
Image credit by Russ Bowling