China’s investments in Israel’s cyber security and medical technology devices have reached a record high of $16.5 billion, an increase seen since U.S. President Donald Trump introduced tighter regulations on international investment.
Although China has been a vocal critic of Israel on the Palestinian issue, the two countries have had close diplomatic ties since 1992. China is Israel’s second top export destination after the U.S. Prime Minister Benjamin Netanyahu visited China earlier this year to celebrate 25 years of cooperation between the two nations.
Because of increased protectionism and tougher regulations in America, China has increasingly turned away from the U.S. in its search for fruitful investments in technology. Indeed, Reuters reported, “Chinese bidders scrapped a record $26.3 billion worth of previously announced deals from the United States in 2016.”
Recent major deals between China and Israel include Chinese phone manufacturer Huawei’s buyout of Israeli cyber security company Hexa Tier for $42 million. Huewei reportedly plans to use Hexa Tier establish a research and development center for databases.
Stefan Silver, director of operations and development at Wise Money Israel, confirmed this uptick in Chinese interest in Israeli innovations.
“We have certainly seen an increased interest from Asia in general, and also from China specifically, in Israeli investment opportunities, whether that be the capital market or other investment options,” Silver told KNI. “The Chinese are very interested in Israeli innovation and are searching for technologies and companies that they can purchase and import to China to gain competitive advantages in their local markets.”
Silver noted that XIO, a Chinese-European led investment group, is looking into purchasing one of Israel’s leading financial investment firms in a potential multi-billion shekel deal.
“Looking ahead, it makes sense to assume that we will see China and other Asian nations playing an increased role in Israeli investment opportunities,” Silver said.
As Israel is a major ally of the U.S., these deals may raise some eyebrows in security and investment circles as China seeks to purchase sensitive technology.
“China’s international surge of state-driven investments in emerging technologies should put the United States and our allies on notice,” North Caroline Rep. Robert Pittenger told reporters.