Tuesday, July 24, 2007

Hasn't China proved her self already? The HK case study

China is still in the mode of having to prove herself to investors; it is still too risky they say, IP infringement, tight local networking makes for a tough glass roof and more and more criticism and objections.

The skeptics among us, ask: Has China really "opened up"? Can they be trusted? What does the Chinese Government really want? What is their hidden agenda? Are they not just trying to lure us into believing in them so that they can later exploit our (westerns) success?

But, the answer is actually quite clear, when presenting the best case study ever – Hong Kong SAR Special Administration Region.

On the first of July 2007, 10 years have passed since the handover of HK to China.
In 1997 when people where getting their foreign passports sorted out and their money transferred to the west, many people assumed that this was the end of HK as they knew it. No more the worlds most Laissez-faire economy, no more the best efficiency, no more: transparency, free press and of course the end to the money making machine of HK. But as the years passed on people started to understand that the Chinese Government has stuck by all its agreements and really has left matters of economy and legal issues to be dealt by the HK government, abiding by the Special Administration Region arrangement.

And lo and behold 10 years have past and HK is still the most Laissez-faire economy. Little by little the HK people started to be proud of there Chinese heritage and started to understand that it is all for the better. They are now part of the biggest growth engine on Earth, the new money making machine "CHINA". Since the handover, business (after a short slump) went up and the pie of opportunities has grown, today HK not only enjoys the growth in HK, but the growth in Mainland China as well.

So now after China "proved", over a 10 year period, that what they really is just to take their rightful place among the leading nations and to be integrated into modern society, have they earning our trust.

I say YES, we can all start investing now……

(For those readers with the conspiracy theory state of mind and knowing the long term vision in China, you will need to wait another 10 years, but for me 10 years, is a good enough retrospect)

Sunday, May 20, 2007

To drink or not to drink, what is a gal to do?

Recently we were invited to the Chinese Economic and Commercial Counselor in Israel for dinner and as always the bottles of alcohol (Moutai - Chinese liquor, especially) were being pored lavishly. Having a Chinese dinner is really great fun, meeting new people, eating good food, and drinking. Now, I personally like my occasional glass of wine and alcohol and I might even drink more than one, but even I, who likes to drink, can not totally commit to the expectations of drinking and bonding under Chinese culture.

Drinking in China is a very significant part of bonding; this is a way to check out your partner and to create a strong relationship. The drinking part is actually very clever, only after one takes off their work/professional mask, allowing oneself to be relaxed and truthful, only then, can you really see, who is the person behind the mask. Drunkenness is a kind of a truth serum in which you can measure a man or woman as to there integrity, and see how they behave without keeping up appearances.

To my first question, does a woman have to participate in this custom?
Generally speaking, yes, you should probably agree to at least one drink and make it last for the whole night; this is a matter of curtsy and showing a willingness to cooperate.

I usually stop after the second or third and politely decline additional Gambay (bottoms up), it is usually accepted by my Chinese hosts who then exert more pressure on my male partners (this is one good female perk).

If you really don't like to drink, find yourself chinese female partners, with them this is not a problem, because apparently women all over the world drink less and bonding through drinking is not an issue. (We bond through stories about our children, child raising and occasionally shopping).

In any case when drinking in any circumstance don't forget the usual ratio of 1 small glass alcohol to 1 large glass of water.

Wednesday, May 2, 2007

The writing is on the wall. Why are Y O U not paying attention!!!!!

  • Based on recent growth statistics, China has become the fourth largest economy in the world, trailing only the United States, Japan and Germany and up from the sixth largest in 2004. Some analysts have even estimated that by 2035 China might surpass the United States as the world's largest economy.
  • 57% of the leaders of small and medium sized enterprises (SMEs) in the Asian pacific region believe China will become the world's largest consumer market in 10 years, overtaking the United States ( 2007 Asia Business Monitor).
  • China will take the "world's champion exporter" title from Germany as early as 2008 and already this year, China will overtake the United States as the world's number two exporter, (predicted Gerd Herx of the federal foreign trade body BFAI) with an estimated US$1.4 trillion in exports in 2008.
  • Stephen S. Roach of Morgan Stanly predicted that by 2025 China will overtake the U.S. as the most influential country in global economic growth. Today Mr. Roach is moving to Hong Kong to become head of Morgan Stanley Asia. This 61 year old veteran businessman has decided to experience the most recent economic revolution in the place where it is happening.

    It is mind boggling to me how so many people and businesses worldwide still choose to ignore the Chinese market. The excuses are very common: You can't do business with the Chinese; working in China is too risky; they are not trustworthy, they'll copy your ideas and technology and many more.

    You must differentiate between the risk and the enormous opportunity. The world has been given a chance to experience a new revolution. An Industrial/high-tech revolution, much more accelerated than we've ever seen before. How can we choose to ignore this prospect? This is the gold rush of the 21rst century and it's less risky than before. If we examine the actions taken by the Chinese government and Chinese businesses, we can see very clearly how they're moving to implement the Chinese vision of becoming equal global players, rising to the level they are entitled to.

    Yes, I grant that it is moving slower than some would like, but one should not expect quick changes, because this could bring on dangers of uncalculated evolvement. Let China Evolve and simultaneously enjoy its fruits, because if you join the wagon from the beginning when it is difficult, you have a better chance to be there when it's easier and ripe.

Sunday, April 15, 2007

Four fantastic years in HK

Our beginning in HK was not a very diplomatic one. On our way to HK we decided to take a family vacation in Thailand, which was very enjoyable and very much needed, taking into consideration our very difficult year in Qatar (different story, different time, will tell about it one day). Anyway we boarded Thai Airways almost straight from the beach due to time constraints expecting to be collected by the consulate driver and taken directly to our apartment (we were not fully accredited yet). What we did not expect, was that while we were on the plane the accreditation arrived "entitling" us to a full blown reception by the deputy head of protocol of the special administrative region (SAR) of Hong Kong in the very luxurious VIP room at the HK airport. This was quite embarrassing since we did not look like the typical HK diplomats. We were wearing our very torn jeans and cool tee-shirts with 3 hungry and tired children. At that point we learned the hard way, never to be taken off guard and that we will probably have very few moments to ourselves in this very small Island. Of course the protocol people were very understanding and sympathetic and nothing on their face hinted the awkwardness of the situation, I still wonder what they thought about us at the time.

You might say that HK is not really China and you would probably be right. Although formally HK is very much China, on the other hand it was the perfect micro system, for me to learn the importance of this vast country (China) to my very dear, struggling and much smaller one, Israel. HK opened my eyes to the opportunities for Israeli technologies and companies in China.

Very quickly I saw and understood that Israeli companies have great potential in China. That Israeli companies should put less emphasis on the American and European market because they hold very little growth and although they were the typically traditional markets for Israeli companies there is, no longer any real opportunity there just incremental growth. Israeli companies can not survive or keep there advantage on incremental growth, they need a market that can give them exponential growth, this is the Chinese market. Some companies have come to this reckoning, but others still resist for different reasons. There are those that are perturbed by IP infringement, those that heard of how people lost all their money in China and those that just don't understand or don't what to bother to learn how to do business in China. All of them might be right, but this is no excuse because today there are many ways to overcome these obstacles. The Companies have to look at the bigger picture, when one is given an opportunity like this, no company as strong as it is, can decide not to pursue it. The sooner companies understand this and execute by it, the better. Only then will they continue to be a real competitor in the international rat race.

From the other side of the map, more and more companies and people in HK and China felt that they have a real partner in Israeli companies and that they are really interested in Israeli technology. There was also a feeling that they can communicate well and that this partnership can work in the long run. Israeli companies although seem aggressive are very pragmatic and are willing to go to great lengths to make a deal work. Our technology is flexible and not rigid, it allows for change and different protocols and specs.

People in HK and China were and are always curious to understand what has made Israel so successful in many terms, although it is very small and plagued by war and violence. Unfortunately, in a twist of fate our greatest hardships were those that brought us the most success and fame. On the one hand many of our technological innovations are based on military technologies, and on the other our innovative spirit is due to the fact that in Israel "no" is not an option, in our mind "one" can always find a solution to even the hardest of problems, it is usually not conventional, but it also usually works. We have a motto if you can't enter through the door then try through the window, and this is why we may seem to some as aggressive, pig headed and even at times impolite. For us to get the job done comes first and foremost and one doesn't bother with trivial things like niceties…….(in a few weeks I will write about how to understand and get a long with Israeli business people)

Once people understood the benefits of doing business with Israeli companies, they also understood that Israel being far is not that great an obstacle. At my time and till today you see how the technological exports are on the rise. It came to the point that several of the big companies in HK, would contact our office as a first resort when they where looking for new technology.

To mention just a few of the Israeli technology that were incorporated in HK companies, here are a few examples: Orad Hi-Tec Systems is used in the Hong Kong Jockey Club, providing a dynamic horse tracking system with multimedia presentation for horse racing. Orad's CyberSet Virtual Studio and CyberGraphics 3D Real Time are also used for air graphics for web casting for TV productions in Hong Kong's major TV stations.
Starhome, a telecom company, implemented its Dialing Assistance Service at CSL – one of HK's cellular operator, enabling visitors easy roaming and generating additional revenue for mobile operators,
NICE Systems technology is used at the Jockey Club, insurance companies and 70% of the banks in Hong-Kong for recording customers' calls.

First Passover without grandmother

This Passover (1rst-9th April) was the first without my grandmother. My grandmother died on Thursday 29th March, after she was hit by a car. She was an 87 year old wonderful woman that had a great impact on me and on my family.

It's very meaningful that my grandmother died just before Passover, since Passover so much symbolizes her.
First of all it is the holiday of freedom, the holiday that celebrates the people of Israel's transcending from slavery to freedom. After many years of repression in Egypt the Israelites forced their way out of slavery into freedom with all their power and God's might. This was my grandmother other than always taking care of us; one of the most important things for her was her freedom. She wanted to be free to do her thing, not to be bonded by other people's opinions and deeds. She always taught us, as well, that we have to be free in our doings and thoughts.

The other important characteristic of Passover is to be with family. That too was her legacy and she not only talked about it, but did all in her power to get us together and made sure we enjoy one another's company, be real friends and strengthen each other. She always got us together, all generation: my father and my aunt and there spouses are the best of friends; till today one of our best friends is my cousin and his wife and she also got her great grand children together, on her deathbed, they mentioned this very important legacy as there own as well.

So on the holiday of freedom and family, my dear grand mother died, so befitting and typical.

We shall always love and cherish her memory.

Tuesday, March 20, 2007

Introduction

Hi everyone,

My name is Ornit Avidar and this is my China–Israel blog.

Working and living in Hong Kong (HK) for four years, (2001-2005), as Commercial Attaché for the State of Israel, has enabled me to see China from within and without. HK opened my eyes to the opportunities for Israeli companies in/with China. Today after leaving my government position, and joining CIVC- China Israel Value Capital, a private Equity firm, which invests in Chinese companies that join venture with Israeli companies/technologies, http://www.civcfund.com/, I have the opportunity to continue bringing together these two great nations, continuing to promote Israeli technology in China and enjoying every minute of it. This relationship is very dear to my heart and that is why I decided to write this blog.

Sadly, until I came to HK in 2001 (very late, I know), I was completely unaware of China and its promise. Yes, I studied about China in the university (late 80's) and read some very interesting books about China and its culture, but they all related to Chinese history, especially the Cultural Revolution (not a pretty picture) and I could not know how it would affect my personal future and that of my country.

From the first day I set foot in HK, I began to understand and yes you can even say I had a revelation of the significance of China to Israel. As a diplomat I was lucky enough to be able to do something about it as well. (More about my experiences in HK, later on)

Beyond the great implication of the mutual relations between Israel and China (which deserves a chapter in itself), China as an emerging economic superpower has the ability of imposing new standards for the global markets and Israel's technology which has an enormous level of flexibility can compliment this effort. Collaboration is in both sides best interest.

In my blog I will be writing and discussing China-Israel relations on all its perspectives through my experiences in China, working as an Israeli, Woman and investor, dealing with cultural differences, and my efforts in getting Chinese and Israeli companies together.

China - Israel Relations (the basics)

When thinking about the relations between China and Israel, many Israelis (yet not enough) will know why I think this subject is so important and understand the value of this connection to the continued development of the State of Israel. Many Chinese will also understand the significance of these relations and the history behind it. Other nationals might question the whole issue of the connection between such a massive country and a much smaller one, (one of the smallest countries in the world).

What do these two have in common and what brings them together for a long-term lasting relationship?

Well, as our former Prime Minister Ariel Sharon said: "Together we are more than 1.3 billion people" Ha ha ha… Jokes aside, there is a lot in common between both countries and nations, historically and even more so future common interests.

The phrase which best expresses these relations is "mutual appreciation and respect". Already in the early 50's the late Prime Minister David Ben Gurion, had an insight to the potential of China and its importance to the State of Israel.

Mr. Shimon Perez, told me in one of his visits to HK, that Ben Gurion was anxious about China and stated: "they don't know us and this deeply concerns me". Already then, he understood the potential of China and was worried that they would not get to know us well. He then instructed his government to support the 'One China Policy', although China was far from being friendly to Israel at the time (also being the first country to allow the opening of a Palestinian embassy). He also instructed his government to keep good connections with China, which in retrospect led to the good relations today; the Chinese have a very long….memory span.

In the 80's even before Israel had full diplomatic relations with China, Israel developed an Agriculture farm and dairy farm at Yong Dian Li, outside of Beijing (today only the dairy farm is active). This, I believe is one of the strong foundations of our ties today, (Another one of course is the story of the small Jewish community in China which I will write about in the future). This project was very instrumental in how future relations had evolved and the understanding of the benefits of this relationship to both sides. Technologies used on that farm have assisted to open the eyes of the Chinese government in general and of Chinese farmers specifically to a more efficient way of farming. Technologies that utilize natural resources in a smart and economic way, that produce a much better yield (multiple yield of the local yield) and more. Till today Chinese government officials, as well as managers of private companies, mention this project to me which enforces how important this was in their perception of the relationship.

Eli (my Husband) and I went on an official tour to Tibet (leaving that conflict aside for a moment) in the summer of 2005 with a group of diplomats representing 8 countries - Mexico, Finland, Saudi Arabia to mention a few. One of our more spectacular moments were when everywhere we went the officials stated that they were very happy to receive the international delegates and especially the delegates from Israel, since (and every time it was a different story), a couple of years ago an Israeli businessman; scientist or other expert assisted in hydro power; business development or other matters. It made us both uncomfortable (political correctness) and full of pride at the same time. I remember thinking at that moment, that because of my countrymen's goodwill, curiosity and eagerness, people in this far away place have a very good image of Israelis and were eager to do business with us. They kept expressing their praise and eagerness to continue and work with Israel.

Having said that, this long term memory span can have a negative effect as well. The Falcon deal for instance will always haunt Israeli business people in China. In 2000 the Israeli government agreed to sell to China the Falcon surveillance system, due to American objection, Israel retracted on the deal causing much embarrassment on both sides. On the one hand the Chinese understood this balance of power recognizing the US's power over the small country which is under her wing, on the other hand they did not appreciate being stood up on this very significant deal. Since that time, Israel's reputation was damaged to the point where till today, 7 years later, there is still suspicion that Israelis will not follow through.

Historically, Official diplomatic relations were established eventually in January 1992. This was subsequent to the Agriculture & Milk project I mentioned previously and others like it as well as secret meeting between the foreign ministers of the two countries in HK. Since the establishment of diplomatic relations, the two sides have frequently conducted reciprocal visits at various levels, and have strengthened ties in such fields as politics, business, education, culture, technological cooperation and agriculture.
(See the links to the embassy website on your right)
(Next week I will share some of our experiences in HK)