Xi’s grand China vision: What’s in it for Israel?

Forget Donald Trump and his rants about locking up Hillary Clinton, building a border wall with Mexico, moving the US Embassy to Jerusalem or “Making America Great Again.”

The real story is Chinese President Xi Jinping, who will remain firmly in charge of the world’s most populous nation long after Trump has retired to Mar-a-Lago and his tweets are forgotten.

In October, during the 19th National Congress of the Chinese Communist Party in Beijing, Xi had himself written into China’s constitution. This, along with his three-and-a-half-hour opening speech in which he outlined his blueprint for transforming China into a global power by 2050, makes it fairly obvious that Xi is now China’s most influential leader since Mao Zedong.

What that means for Israel — which last January marked 25 years of diplomatic ties with Beijing — is a matter of enormous political and economic importance.

To sort it all out, the Israel-Asia Center invited three experts for a Dec. 24 panel discussion titled “Xi’s Vision for China’s Global Future.” The event featured Roi Feder, the Tel Aviv-based managing director of APCO Worldwide’s Israel operations; Alexander Pevzner, founding director of the Chinese Media Center (CMC) in Rishon L’Zion, and Huang Shan, deputy managing editor of Caixin Media.

Roi Feder (right), managing director of APCO Worldwide Israel, makes a point as Alexander Pevzner, founding director of the Chinese Media Center (CMC), listens during a Dec. 24 panel organized by the Israel-Asia Center in partnership with CMC. Photo: Maya Hadash

Michael Arnold, Israel bureau chief of Bloomberg News, moderated the discussion, organized in partnership with CMC and attended by 65 people at the Tel Aviv Stock Exchange.

Chinese support at the UN? Don’t count on it 

Noting that China is Israel’s largest trading partner in Asia — with annual bilateral trade volume exceeding $11 billion — Arnold asked the panelists how realistic it is to think that closer ties with China (population: 1.4 billion) will lead to some kind of political dividend for Israel where it matters most, like support for the Jewish state at the United Nations.

“It’s clear to Israeli policymakers that that’s not going to happen, as long as China’s trade with the Arab world is so much bigger than with Israel,” replied Feder, who as senior advisor to the Israeli government’s China-India-Japan Fund has worked with many of China’s leading conglomerates.

It surprised no one that China was among 128 countries that voted in favor of last week’s UN General Assembly resolution condemning Trump’s recognition of Jerusalem as Israel’s capital city (only nine countries opposed it, and 35 abstained). As one of five permanent members of the UN Security Council, Beijing has long supported the Palestinian cause, despite its warming ties with the Jewish state.

Indeed, Feder suggested that even though record numbers of Chinese companies, delegations and tourists are flocking here, Israel must figure out how to explain its strategic relevance to China beyond high-tech. “Until we do that, we’re not going to see a change in political dividends.”

Chinese President Xi Jinping, who came to power in 2012, is China’s most influential leader since Mao Zedong. Photo: Kremlin.ru

Huang, one of China’s leading financial journalists, stressed that “when it comes to Middle East politics, China walks a very delicate line” — and that there’s a clear separation between “economic partner” and “political partner.”

“We don’t want to overplay our role in the Middle East. This is a really politically sensitive area — a powder keg — and we don’t want to wade too much into it,” said Huang, speaking via Skype from Beijing. “Here in China, it’s politically correct to say we side with the Palestinian cause. I don’t think anything will change this official line. The Chinese don’t want to irritate our Arab friends and allies. But in some other ways, China tries to play a more balanced role.”

Introducing ‘Xi Jinping Thought’

Pevzner, analyzing the significance of the recent 19th Party Congress, said Xi’s speech focused on two centennial goals. The first is to achieve a moderately prosperous society by 2021, the 100th anniversary of the Communist Party of China (CPC).

“This is not a mere slogan,” he said. “Despite the progress China has made in the past 35 years, it’s still relatively poor. China’s GDP is only 55 percent of the world’s average. So this means eradicating extreme poverty and raising living standards.”

The other centennial goal is to make China “a completely modern, strong country, a model the world would like to learn from,” by 2049, the 100th anniversary of the founding of the People’s Republic of China.

Michael Arnold, Israel bureau chief at Bloomberg News, moderates a Dec. 24 panel discussion on China organized by the Israel-Asia Center in partnership with the Chinese Media Center. Photo: Maya Hadash

“Xi Jinping has been in power since 2012, when he was appointed general secretary of the party. But the era of Xinping also means making sure all the party is completely behind him, and focused on his vision,” said Pevzner. “The mere fact that the speech was three and a half hours is a message in and of itself. And as he said, the Chinese Communist Party is the biggest party in the world; it has to act big, not just be big.”

By any measure, the CPC is huge; its membership of 89 million is 10 times the population of Israel. The party is also extremely powerful in China; at its week-long congress at Beijing’s Great Hall of the People, Xi consolidated his control over the government with the CPC’s decision to amend its constitution to include “Xi Jinping Thought of Socialism with Chinese Characteristics in the New Era.”

That makes the 64-year-old president the only leader other than Mao Zedong and Deng Xiaoping to have their official Thought enshrined in the party’s constitution while still in office, according to Forbes magazine.

“Here in Israel, we live by five-minute deadlines. In China, the party is going beyond the usual Five Year Plan, mapping out the road for the next 30 years,” said Pevzner.

“Obviously, Marxism in China is very different from Marxism in the former Soviet Union,” he continued. “To a certain extent, the party has to reinvent itself. The Communist Party will probably not change its name, but what does it mean to the average man on the street? Marxist society is atheist, so the Chinese are trying to find a way to create an amalgamation between Marxism and traditional Chinese culture.”

Participants ask questions at a Dec. 24 panel discussion on China that was organized by the Israel-Asia Center in partnership with the Chinese Media Center. Photo: Maya Hadash

Feder: Not just about technology and innovation

For Israel to succeed in China, said Feder, entrepreneurs must focus on areas other than high-tech; these include China’s enormous healthcare, education and environmental challenges.

“One of the few remaining markets for Chinese high-tech mergers and acquisitions is Europe and Israel. And in Europe, we have seen an increasing backlash against Chinese companies. So I think Israel could play a role here,” said Huang, adding that “when you ask anyone on the street in China about Israel, they know it as a powerhouse of innovation and creativity.”

Feder said the Chinese, who are now more interested in the Middle East than ever before, have a potential investment role to play in large infrastructure projects ranging from Israel’s light-rail network to offshore gas deposits in the Mediterranean to future land bridges with Egypt, Jordan and even Saudi Arabia, assuming some future peace deal comes into being.

“How do we take this new wave of Chinese focus and figure out the points of connectivity?” asked Feder. “It’s not just about technology and innovation. The future of the relationship is about what Israel can learn from what’s happening in China.”

Yet one area that’s necessarily off-limits is military sales to China’s $270 billion defense market. Washington objects to Israeli dual-use exports to China, a potential adversary. Another uncertainty is Trump’s relationship with Xi, which could sour for any number of reasons ranging from a trade dispute to tensions in the South China Sea to North Korea’s nuclear program.

Alexander Pevzner, founding director of the Chinese Media Center (CMC), talks during a Dec. 24 panel discussion organized by the Israel-Asia Center in partnership with CMC. Photo: Maya Hadash

For now, Pevzner said, “China is well aware that Israel is cooperating with the U.S. on military technology. I think China is also well aware that we’re selling this technology to India, and I haven’t seen public protests on the streets of Beijing.”

Pevzner, a senior advisor to the Silk Road Group and former director of China affairs at The Israel Project, observed that since Prime Minister Binyamin Netanyahu’s visit to China in 2013, Chinese investment has flooded into Israel.

“Some Arab countries are not exactly happy about this. And during Netanyahu’s recent visit last March, the China-Israel relationship was upgraded to that of ‘innovative strategic partnership,’” he said. “But it’s true that if the China-U.S. relationship deteriorates, it will also, unfortunately, impact our ties with China.”

On the other hand, Pevzner added, “when Trump got into the White House, people expected the sky to fall. The sky did not fall.”