DSC_0337For over a decade, I have been closely following developments surrounding China’s economic rise. Having conducted business in various industries with China, worked in state-owned enterprises, dabbled in the circles of China-centric academia, published on Chinese affairs, it is quite rare for me to feel the element of surprise when reading or hearing something on China. Whether it is an added ‘0’ or ‘000’ to an already-massive statistic or new ‘discoveries’ of how China wields its soft power into unassuming crevices all over the world, I typically stand relatively unfazed. To me, it all weaves into the same story of China’s grandiose and powerful rise to maturity into the 21st century – an amazement in its own right.

But recently, my attention was caught after witnessing first-hand the burgeoning Chinese interest to acquire Israeli technologies. During the last week of January, I participated in a nearly 50-person strong delegation of Israeli investors, each of us representing a different leading Israeli investment firm. I went on behalf of Ourcrowd, the Israel-based equity crowdfunding platform. Organized by the Israeli Ministry of Economy, the delegation was meant to attract hundreds of Chinese funds, leading technology firms, private wealth management groups, family offices & angel investors to build exchanges with Israeli firms. I half-expected to encounter what I usually did when venturing to China with an Israeli business card in hand: some oddball groups who were either brave enough or crazy enough to want to perhaps…maybe…start thinking about engaging in business with this pint-sized miracle country in the Middle East. But, what transpired could not have been more opposite. I was blown away by the savviness, the knowledge, the interest, the true commitment to doing business with Israel.

Israel’s tech scene is no longer some secret, hidden fruit tucked away halfway across the world to the modern Chinese investor. It is here & it is now. As the Chinese would say, Israel’s startup scene is simply ‘very hot’. That is indeed what I felt, and everyone wanted a piece.

As my jaw dropped while listening to tech firm executives casually shoot off names of clever-sounding Israeli startups, I wondered when and how this shift happened. In the past 12 months, Alibaba made its first Israeli investment, PingAn Ventures and Fosun Pharmaceuticals have invested in multiple later stage companies, Baidu and Qihoo360 have placed their bets in a local venture capital firms, the Founder Group and WuXi Pharmaceuticals announced their decision to open an Israel office and now the two countries are slated to begin free trade talks later this year. To put in further perspective, just two or three years ago, I would have been at pains to list even half as many high-profile developments. Cash-rich firms in China have reached a tipping point, are now in greater competition to succeed globally, and in immediate need for an extra differentiating ‘edge’, an ingredient that typically isn’t found home-grown inside Chinese borders. Chinese firms are simply hungry for innovation – the elixir that determines whether a business sinks gradually or swims to the top. And the news is out – Israel is the wellspring.