!Israeli Miracle' is Developing Strong Ties with Communist China
By Adi Schwartz, Ha'aretz 9/8/08
Aug 11, 2008 - 8:36:37 AM
China has also managed to penetrate the Israeli market. The China Civil
Engineering Construction Corporation (CCECC) is tasked with digging the
Carmel Tunnel. It will also be responsible for the civil engineering
aspect of the Red Line of Tel Aviv's light-rail project, which will
connect Petah Tikva in the east with Bat Yam in the south. ZPMC, the
Chinese manufacturer of cranes and metal equipment, this week won the
tender to supply seven bridge cranes to the Haifa port.
The huge Chinese construction corporations are state-owned. This means
that anyone who does business with them is in effect doing business
with the state and with the Chinese Communist Party.
Prof. Marvin Samuels, who divides his time between Israel and China,
and has been following relations between the two countries for many
years, says that, "In the past year, Israel has received amazing
positive spin in China." Samuels, an adviser to the Chinese Ministry of
Communications and a lecturer at the Hebrew University in Jerusalem,
points out that this trend is reflected in news reports in both the
governmental and semi-independent media, "and in tremendous interest on
the part of senior politicians as well as corporate executives. If
Chinese companies have begun to do business in Israel, it is very
probable that senior officials in the Chinese politburo gave them the
green light to do so."
Zhou Hui, the commercial attache at China's Embassy in Tel Aviv,
confirms that his government encourages Chinese firms to come to
Israel. He says that the amount of trade between the two countries has
increased dramatically since diplomatic relations were established -
from $50 million in 1992 to about $4.5 billion in 2007. The balance of
trade remains highly uneven: China exports goods and services amounting
to some $3.5 billion to Israel, whereas it imports only about $1
billion-worth from Israel.
"China's presence in Israel as an infrastructure builder is new," says
Samuels. "In the past, China used to export mainly cheap labor to
Israel. But in recent years Chinese companies have been realizing huge
projects, including power stations, airports and railroads. A Chinese
company built the subway in Tehran in the past decade. The CCECC is now
1,300-kilometer railroad along the entire length of Nigeria. Previously
it won an $8-billion infrastructure tender in Algeria."
Zhou says that Chinese entry into the Israeli market has been
relatively slow, since it requires adapting to a business environment
that differs from that in the Third World. "We have very skilled
workers," he says. "They can dig tunnels at a rate of 700 meters a
month, as they are doing with the Carmel Tunnel. But Israel is the
first developed country China is entering for infrastructure projects.
For now this activity is limited to that of a subcontractor - but it is
nevertheless a big challenge for Chinese firms, which are not
accustomed to Western standards of regulation, for example, or workers'
The Carmel Tunnel will connect the Check Post junction, at the city's
northeastern entrance, with the fairgrounds area in the southwest. The
tunnel, some 4.7 kilometers long, is scheduled to open in
2011, and will be the longest of its kind in Israel. The tender for the
entire project was won by Carmelton, and it in turn chose the Chinese
company as a subcontractor for the excavation work. The cost of digging
the tunnel is estimated at $90 million. Ami Morag, the project's
administrative director, says some 550 Chinese are currently residing
in Haifa while they work on the project, including about 50 managers
and 500 workers (both engineers and laborers).
"The Chinese company has rented buildings in the city to house the
workers," Morag says. "These are pleasant residences, with a washing
machine and electrical appliances. It's a far cry from Levinsky Street
in Tel Aviv [where many foreign workers live in often rundown
In Tel Aviv's light-rail project, CCECC holds 25 percent of the shares
in the consortium undertaking the work. Other members include the Lev
Leviev's Africa-Israel Investments and the German company Siemens,
which will be in charge of the electro-mechanical work and will supply
(The Chinese company will be in charge of the project's civil
engineering work.) The contract for the franchise, which was signed in
May 2007, is for 32 years, including five years of construction and 27
years of operation.
Commercial attache Zhou notes that there are many more projects in the
pipeline. One of them, for example, is a future tender for renovating
existing rail lines. In addition, a huge Chinese home-appliance
manufacturer is considering opening a research and development center
in Israel, and representatives of the Chinese car manufacturer BYD
visited Israel just this week in order to examine the possibility of
cooperating in the field of electric vehicles and hybrids. "The present
situation still does not reflect the full potential between the two
countries," says Zhou.
To make money
China has very good relations with the Arab world and with Iran.
However, Samuels says, Beijing wants to maintain good relations with
the West, too. The investment in Israel is a clear signal that China
does not lean in one direction only.
Amos Nadai, Israel's ambassador to China, has a somewhat different
opinion. He attributes the Chinese interest in working in Israel to
purely economic motives. Nadai says most of the investments and
projects China is involved in in the developing world were designed to
guarantee it a supply of minerals and energy sources. The country's
annual growth rate of 10 percent in the past three decades has prompted
a tremendous expansion of its middle class. Some 150 million people
have abandoned the village for the city in the past decade, and
estimates predict that at least another 50 million will join them by
2010. The energy consumption of a Chinese metropolis is on average 2.5
times higher than that of a village, meaning the Chinese economy needs
whatever it can get: cement for building, oil, soybeans, wheat and many
other basic commodities.
These goods can be found aplenty in African and Arab countries, says
Nadai, and it is there that China is trying to establish its political
status, with the hope of guaranteeing a regular flow of raw materials
and quarries. Israel, however, has other attractions for the Chinese.
"I keep hearing compliments about the ancient culture of the Jewish
people and the old tradition," says Nadai, who took up his post in
China about a year ago, "and about the ability to build a modern
country out of them in a span of 60 years. These comparisons make the
Chinese feel close to us: They, too, have a glorious tradition and
they, too, are trying to develop a modern country quickly. They feel
that they have something to learn from us.
"Only recently a large team of Chinese state television employees
visited Israel for a period of three weeks, to research the 'Israeli
miracle.' Now they are visiting several places in the world that used
to have large Jewish communities, in order to examine the Jewish
community's influence on its surroundings. Their idea is to try to
decipher the secret of the Jews' success."
Nadai says that, "as a diplomat who has served in other countries in
the past, I can say that there are no parallels today to such an
attitude toward Israel and the Jews
Source: Ocnus.net 2008