Minister Naftali Bennett: Conclusions and insights from my week in China
FaceBook 29 November 2014

General insights:

1. China is a market of infinite growth - 1.4 billion people! Many in China
are flocking to the coastal cities and joining the surging middle class.

2. China has no anti-Semitic or anti-Israel activity. On the contrary, they
have great respect towards our innovation capabilities and our technology.
It should be noted that during the Holocaust they opened their doors to
Jews, unlike most of the world.

3. China needs our innovation and entrepreneurship. They have to feed 1.4
billion people. They have a severe water shortage including in their farming
land and agricultural territories. Yes, you heard right. Therefore, they
need our technologies to produce as much food and as much water as they can
from every square meter.

4. They have a serious need for our innovation and technology in other areas
as well such as medicine, communications, security, energy and more.

5. It is very difficult for an Israeli company to enter the China market.
There are many cultural difficulties, it can be tough to find the right
partner, bureaucracy is very complicated, they follow a different legal
system, among many other challenges.

6. Entering the Chinese market takes much longer than U.S. or Western
European markets.

7. In the past there were serious problems with intellectual property and
patent theft. The situation has improved, but there is still a long way to
go. Their government understands that in the long run they must provide a
solution to this problem, otherwise foreign companies will stay away.

8. Today there is a special window of opportunity to enter China. Many
countries are jumping at this opportunity.
**
Conclusions for potential Israeli companies:

1. If you are a new start-up company taking your first steps, I recommend
focusing initially on markets in developed countries, U.S. and Europe,
before entering China.

2. Companies with a proven product and client list who seek long-term growth
should examine possibilities in China.

3. Utilize our services, our economic attaches in the Economy Ministry! I
was skeptical at first, but I have learned that they are simply superb. You
should view them as a business development body designed to serve you. You
should also utilize our Export Institute, which does an outstanding job.

4. Look for an excellent local partner, or, alternatively, set up a local
office. You cannot operate a business in China by remote control.

5. Entering the Chinese market has to be a strategic decision, not a
tactical one. You need to show long-term commitment, and you need to make a
significant financial investment. You cannot do it "on the fly”.

6. We have set up a free business center in Shanghai for all Israeli
companies. There you will get basic office services (office space, meeting
rooms, fast internet, telephone services), with a special added value - free
consultations, connection to potential clients, local information and much
more. Take advantage of it.

Phone: +862161838235

Mail: Sbc@israeltrade.gov.il
**
Conclusions for the State of Israel and the Israeli government:

1. We have to strike the Chinese market with full force. It must be a
national goal of the Israeli government and all ministries. This has deep
strategic implications for the State of Israel over the next 50 years, on
all levels.

2. In order to double, triple, or even quadruple our trade with China, we
have to show long-term consistency and determination. That includes
increasing the number of visits by ministers (science, health, finance,
transportation, education, PM, etc.), even if it is not as fun as visiting
Paris or New York. The Prime Minister's visit to China brought about a
profound change for the better.

3. We must increase our assistance package to Israeli companies operating in
China. I personally did not wait for government policy to change and moved
economic attaches from other countries to China. It is a good start, but it
is not enough. We need to do more.

4. We now have an excellent team in China: Ambassador Matan Vilnai, our
Consul in Shanghai Arnon Perlman, and the entire China economic attaches
team: Ophir, Noa, Elad, Eliran, all of their employees, and of course Yifat,
Estee and many more. We must increase our presence in China and reach every
significant city.

By the way, in contrast to our typical Israeli method of operation, there
are no ego wars here. Everyone is actually really dedicated to the mission.

5. We need to increase the number of flights and providers, and create more
competition for the Tel Aviv-China line. The Foreign Affairs Ministry has
already started working on this.
**
Shavua Tov!