Chinese firms invest heavily in Israel – and are eager to do more

Chinese companies do a lot of business globally and specifically in Israel – and are eager to do more. A visit to the country illuminates the reach and realities.

Happiness does not fall out of the blue, and dreams will not come true by themselves. We need to be down-to-earth and work hard. We should uphold the idea that working hard is the most honorable, noblest, greatest, and most beautiful virtue. – Xi Jinping, general secretary of the Chinese Communist Party, chairman of the Central Military Commission, and president of the People’s Republic of China

Days before the opening of Tel Aviv’s Metro Red Line, largely built and now partially managed by Chinese companies, a visit to China revealed just how wide and deep the Israeli-Chinese business connection is.

The eight-day tour of corporate headquarters and construction projects in Beijing, Hangzhou, Shenzhen, Macao, and other locales was sponsored by the Tel Aviv-based Chinese Enterprises Association in Israel, which represents major Chinese companies with business interests in Israel.

The Israeli projects listed are a small fraction of the work these Chinese behemoths are conducting in their homeland and around the world. China State Construction is the world’s largest builder, with more than 380,000 employees, and 2023 revenues that will exceed $300 billion. It ranks 13th on Fortune magazine’s Global 500. The company is mostly owned by the Chinese government, but about one-quarter of its shares are traded on the Shanghai and Hong Kong stock exchanges.

It has built 7,000 projects in 130 countries, from the Addis Ababa National Stadium in Ethiopia to Zaire’s Stade des Martyrs, as well as Trump International Golf Club in Dubai, and the Great Mosque of Algiers. We visited the Beijing National Aquatics Center, the bubble-sided “Cube” swimming and diving complex that China State built for the 2008 Beijing Olympics.

Now dubbed the “Ice Cube,” it was repurposed for curling competitions in the 2022 Winter Olympic Games. The other half of the complex contains what we were told is the world’s largest indoor water park. The hundreds of screaming children and adults in a pool, mimicking dance moves by an entertainment troupe, may have made it the world’s noisiest as well.

“Wherever you are, follow local customs.” – Chinese proverb

One of our first meetings was at China Civil Engineering Construction Corp. in Beijing. It was a formal session, more befitting a diplomatic summit than a session with a gaggle of journalists. The Israelis and the Chinese were seated across from each other in a conference room with our names in Chinese and our hosts’ names in English. Side-by-side Israeli and Chinese flags bookended the table.

In comments read from a written script in Chinese, and then translated into English, the company’s president, Chen Sichang, offered a litany of the projects they had completed in Israel, including more than 15 km. of tunnels in northern Israel and housing projects that brought 500 Chinese workers to the country. Chen was frank about what he wanted from the Israeli media delegation.

“We want you to tell our story in a fair and objective manner and to contribute to more social and economic development in Israel,” he said, ending with a pledge to visit Israel this year.

My compatriots drafted me – the “elder” of our group – to respond. I stood up and spoke extemporaneously of how the ancient Jewish and Chinese cultures are confronting modernity and how we can not only learn from each other but how we have much to offer the world. I guess my words went over well; at lunch, where we also sat in assigned seats, our hosts insisted on making numerous toasts with fiery baiju, a 53% alcohol, clear liquor brewed from sorghum grain.

Drinking liquor at business lunches in China is common. Our Beijing hosts were so impressed by our ability to soak up the local booze that they gifted us with commemorative bottles of Kweichow Moutai, the finest brand of baiju, which is produced by the world’s largest distillery company, also traded in Shanghai.

Thankfully, not every meal was so liquid. In other, less formal cities, we toasted each other with tea or yogurt drinks. I was grateful to get a nap after that lunch, which began just before noon. All our business meals began at noon and 6 p.m.

We think too small, like the frog at the bottom of the well. He thinks the sky is only as big as the top of the well. If he surfaced, he would have an entirely different view. – Mao Zedong, founder of the People’s Republic of China and chairman of the Chinese Communist Party from its establishment in 1949 until his death in 1976

The Chinese think big and plan for the long term. China State, China Civil Engineering, and most of the other companies we visited are part of the country’s global Belt and Road Initiative (BRI). The project, now in its 10th year, comprises infrastructure projects in dozens of countries loosely grouped around the path of the ancient China Silk Road, a network of trade routes dating back two millennia that connected China to the Mediterranean.

In its own words, the project is a “trans-continental passage that links China with Southeast Asia, South Asia, Central Asia, Russia, and Europe by land, and a 21st century Maritime Silk Road, a sea route connecting China’s coastal regions with Southeast and South Asia, the South Pacific, the Middle East, and Eastern Africa, all the way to Europe.”

It is due to run through 2049, the 100th year of the People’s Republic of China’s founding. The projects in Israel fall under that umbrella, as do projects in Pakistan, Nepal, Singapore, Botswana, and other countries.

It’s worth noting that most Chinese projects are in the countries of the former Soviet Union, Eastern Europe, Middle East, and Africa. Western European projects are few and far between, as are those in South America and North America. Essentially, countries in the European Union or in the American sphere of influence are outside China’s grasp – for now.

I asked China business expert James L. McGregor, a former journalistic colleague of mine who lived in Beijing for more than 20 years, and who is now a widely quoted consultant and analyst, for his thoughts on the Chinese initiative.

“These offshore infrastructure projects under the BRI are ever more important. Since the Chinese economy has slowed significantly, the needed infrastructure at home has been built, and sometimes overbuilt, [and] so many Chinese companies can expand only by going overseas,” he said. “The danger in this, however, is that these BRI projects are financed by Chinese lenders, and too many past projects were built in poor countries that are now struggling to service the debt.”

Success depends upon previous preparation, and without such preparation, there is sure to be failure. – Confucius, c. 551-479 BCE, philosopher considered the paragon of Chinese sages

Each company we visited gave us a tour of their “hall of fame” – displays of projects, awards, and innovations. By the end of our visit, we knew the drill: grainy black-and-white photos of the early projects, Communist-era plaques and letters of congratulation, and razzle-dazzle videos on room-sized screens of the company’s present and future.

At each locale, the tours were given in English by female guides, all dressed similarly in blue or black tailored dresses or suits and high-heeled shoes, with Madonna-style cordless microphones. They read from tablet computers in their hands as they touted their company’s accomplishments. As we traipsed around the displays, company officials – all male – shadowed us and occasionally whispered to them.

Did I sense a bit of insecurity in all the boasting and presentation of awards and models? McGregor described our visit as “a tightly managed and guided tour for journalists to show the positive energy of the people and incredible accomplishments of Chinese business and government.”

But he said he didn’t necessarily think this was a bad thing. He told me that China’s achievements “are all too often lost in the very negative and high-tension ideological back-and-forth between China and the US and many developed democracies.”

In Beijing, every company man wore a suit and tie. The farther we traveled from the capital, the women became less robotic, and the men more casual. But Chinese business casual is nothing like Israeli style. While some of us wore shorts, T-shirts, and Blundstone boots, casual for the Chinese was matching short-sleeved white shirts, black pants, and black shoes.

By the time we reached Shenzhen and the gambling town of Macao, hundreds of kilometers south, our hosts snickered at Beijingers’ formality. Distance from the capital also meant less Communist iconography – monuments of hammer and sickle, murals of Soviet-style workers, and propagandistic messaging – and their replacement by modern sculpture, contemporary artwork, and marketing slogans.

Nowhere was that more visible than in Haiman, where privately owned Longxing Construction is building residential housing complexes. We visited two housing projects. One was for middle-class apartments of four rooms, which will cost 1.5 million yuan (NIS 750,000). The second was a luxury complex of six-room apartments, one to a floor, priced at 7 million yuan (NIS 3.5 million).

Despite a current slump in China’s housing market, we were told that the project has already sold one-half of its units, many to investors who have bought several as rentals. The model apartment we saw was decked out in glitzy contemporary furnishings. The “man’s” room featured a case of luxury watches, and the salon included a telescope. No hammers and sickles in sight.

Where the mystery is the deepest is the gate of all that is subtle and wonderful. – Lao Tzu, sixth century BCE Chinese philosopher, credited with writing the Tao Te Ching, but whom scholars regard as a legendary figure

It is not possible to know a country, let alone one as vast as China, in an eight-day visit. We did not travel to the country’s immense rural interior. We were whisked from city to city by air, high-speed rail, and luxury van, and escorted from corporate offices to construction sites.

On a few afternoons, we were deposited in glittery shopping malls with high-end restaurants that featured chef-worthy renderings of Beijing hot pot dish, spicy fish, and classic Cantonese dishes (the kind served in the first-generation of Chinese restaurants in US cities). Even a stroll around a restored section of “old” Beijing didn’t yield time to wander off to schmooze with “the people.”

We were set free one evening in Shenzhen, a glittering new city home to tech companies and electronics manufacturers and awash with skyscrapers, bicycle and scooter lanes, and shopping malls. On one side of a pedestrian promenade, near our hotel, was a mall featuring Dior, DeBeers, Chanel, Tumi, and the like.

Across the way, a strip of stores selling every brand of cellphone you know, and others you don’t, bracketed a market chock-a-block with stalls selling candy and packaged goods, and street-food vendors offering noodles, rice, and other delicacies for minuscule prices. (I had a huge bowl of noodles and an iced tea for the equivalent of NIS 11.)

In the middle of the strip stood a building with five floors of kiosks offering gadgets, phones, computers, and the individual parts used to assemble them. It is said that you can buy all the parts for an iPhone – many of which may even be original – and have it assembled for about $100. That level of tech skill was beyond me, so I didn’t try.

Our hosts were impeccably polite but reticent on personal and political matters. We laughed together about our mutual unwillingness to discuss Chinese or Israeli politics. When we gently probed issues such as democracy, we were told that not having to “worry” about politics, foreign policy, and the like freed Chinese to devote their lives to work and their families.

Certainly, the seesaw of politics in Western democracies can lead to short-term thinking and rapid turnabouts in policies and actions. The Chinese government doesn’t have to worry about elections, and it can make long-term plans, like the Belt and Road project scheduled to run through 2049.

In times of difficulties, we must not lose sight of our achievements. – Mao

Recent headlines have reported on a slowdown in the Chinese economy. On the macro level, it has not rebounded from its COVID-19 lockdowns. Young adult unemployment is officially 21% but is believed to be higher. A major real estate developer declared bankruptcy recently. The “one-child” policy has ended, but population growth has stagnated. Even so, the annual growth of the Chinese economy is still more than 4%. That’s below the stratospheric growth rates of the 2010s, but it is nothing to sneeze at.

Political tensions at the government level are high. Several high-ranking officials in the Chinese government have been abruptly sacked. The US and China (with little Israel caught between these two giants) are bickering daily. Conservatives in the US Congress want to ban Chinese-owned TikTok. President Joe Biden is trying a carrot-and-stick approach but is leaning more toward the stick by limiting US technology transfers. In many ways, he hasn’t strayed far from hardline, Trump-era restrictions.

Despite the Great Powers’ tug of war, Chinese influence and “soft power” – as expressed in its expansion of trade, cultural, and diplomatic ties throughout the developing world and the Middle East – is vast and spreading. Will it be the world’s leading power later in this century? Will US power and influence wane?

“In waking a tiger, use a long stick.” – Mao

As Israel and other countries slaver at the thought of feeding at the Chinese trough, they should know that the bill will come due one day. They must tread carefully around a country whose national symbols include the dragon and that tiger Mao mentioned.

It would be wise to heed the words of Mao’s compatriot and former Chinese premier, Zhou Enlai, who said: “China is an attractive piece of meat coveted by all… but very tough, and for years no one has been able to bite into it.”

Impressions from the Orient

When visiting a country as vast as China, images of the people and country undoubtedly leave lasting memories. Here are a few highlights from my recent trip to the Middle Kingdom, to visit companies doing business in Israel.

• A slender woman in a skimpy dress and dyed blonde hair shimmies on stage in front of a Western jazz band in a packed nightclub in the hi-tech city of Shenzhen (population 17 million). Well-dressed young adults down fancy cocktails and scroll on their phones as they listen. The minimum tab for a table: 1,200 yuan (NIS 600).
• Two children in traditional costumes pose for photos in front of a massive palace at Beijing’s 114-hectare Forbidden City, a 600-year-old complex that still exudes the power, and extracts the awe, that long-gone Chinese emperors sought to project. Photos taken, the children and their parents exit the grounds, return the rented costumes, and ride away in a Chinese-produced electric SUV.
• In the small – by Chinese standards – city of Haiman, population one million, a housing project comprising more than 20 buildings of 20 to 25 floors is underway. Workers pass through a gate with a facial recognition camera and make their way through an immaculate construction site. Dust is kept down by frequent sprays from an automated sprinkler system. Seven floors up, prefabricated concrete panels snap into place with delicate precision. Each four-unit floor of apartments is completed in a few days.
• A wall-sized video monitor provides real-time information on every aspect of a subway tunnel under construction by a 3-m. tall TBM (tunnel boring machine), which is guided by state-of-the-art software and rock-crunching blades developed and manufactured in China.
• The digital readout at the back of the train car we are sitting in tells us we are traveling 300 km. an hour through rolling hills and green countryside on the world’s largest high-speed railway system. An attendant brings us steaming hot cups of Starbucks coffee. We pay with an app on our phone. No credit card is needed – and none is taken anywhere in China, even at the humblest noodle vendor or soft-drink kiosk in Old Beijing.
• A 20-megawatt, solar-powered electric plant floats atop 1.7 sq.km. of river in Sandu Town, Jiande City. It is surrounded by farms growing corn and other grains, and it sits alongside commercial fishponds without damaging the rural greenery.

THE WORK on the Tel Aviv Metro Red Line and subway system is just one of the projects under construction in Israel by Chinese companies. Housing projects, port facilities, and hydropower stations are among the others. We visited the following companies, which have projects in Israel:

China State Construction and Engineering Company

• Haifa New Bay Port Project
• Tel Aviv Metro Green Line Light Rail Project G3-2 Section
• Kidmat Zvi Residence Project, Lod
• Muzza Residence Project, Herzliya
• Turquoise Residence Project, Caesarea
• Complex C Residence Project, Rosh Ha’ayin

Lou Yusai, general manager of CSCEC in Israel, said: “CSCEC will fully leverage its professional advantages and global experience throughout the entire industry chain, pursue win-win cooperation with excellent local enterprises, suppliers, and professionals in Israel, sincerely serve the social and livelihood of Israel, and bring more high-quality projects to Israel.”

China Civil Engineering Construction Company

• Tel Aviv Metro Red Line construction and operation
• Gilon tunnel (between Acre and Karmiel), Israel Rail
• Carmel highway tunnels (beneath Haifa)

China Power

• 344MW pumped storage hydroelectric power station, Kochav Hayarden National Park
• Tel Aviv Metro Green Line

Longxin Construction Group

• Housing projects in Eilat, Holon, and Rosh Ha’ayin

Shenzhen Metro

• Tel Aviv Metro Red Line construction and operation
• Tel Aviv Metro Green Line

China Railway Tunnel Group

• Tel Aviv Metro Red Line

China Railway Engineering Equipment Group

• Tel Aviv Metro Red Line

The writer was a guest in China of the Chinese Enterprises Association in Israel.

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