BEIJING – In responding to one of the many entreaties he faced as leader of the fledgling Israeli state, David Ben-Gurion once replied to pleas from party colleagues seeking to ease the plight of citizens with a clear and direct message: I don’t know (care) what the people want, but I do know what they need. It was a forthright message fitting for its time that could only have been uttered by a leader who commanded the respect of the people he served.
Israel’s founding father was a well-read man and admired Chinese culture, philosophy, and history, but he probably would not have envisioned, when he uttered that statement in the 1950s, that it would reflect the essence of life in the modern-day People’s Republic of China.
From a weeklong visit of Israeli journalists organized by the Chinese People’s Association for Friendship With Foreign Countries, it’s not easy to gauge what daily life is really like for ordinary Chinese citizens throughout the vast country, the world’s second largest economy. But in observing people in the street and after speaking to some locals and a few Israelis living in China, it is apparent that people do indeed have much of what they need. Whether those ordinary Chinese citizens – 1.4 billion of them, roughly 10% of whom are from ethnic minority groups – should desire other things beyond this scope is very difficult to gauge firsthand, certainly when observers watching from the sidelines see how the city dwellers of Beijing and Shanghai, two of the world’s largest urban centers that aren’t even at the top of the list of most populous cities in their own country, go about their daily lives.
China’s society is hierarchical and disciplined. Crime is reportedly very low, and people are industrious, hardworking, and studious. The statistics are many and varied, but you only have to look around and see that most people are decently dressed, and among the millions of cars on the roads, many are of premium makes, and about 20% are electric vehicles. They are world leaders in the production of EVs.
The Chinese are immensely proud of having brought their country into the modern world in less than half a century since then-leader Deng Xiaoping announced the Open Door Policy of 1978. It was a call to the world to come to invest in China, and it led to a transformation of the country into a thriving industrial giant that is now an investor and a builder in other countries across the globe, and an innovator at home.
Founding father, chairman Mao Zedong died a few years before Deng’s decree, and his successors have stormed through that open door, realizing that maintaining a Communist economic ideology could not possibly improve the living standards of the people, sustain its needs, or grow its global economic standing. The official designation of the economy is that it is based on socialist values, but when you see so many luxury cars on the roads, and the plush shopping malls are replete with the outlets of all the Western world’s leading luxury brands, it makes you wonder what Karl Marx would have thought had he been transported back through time onto Nanjing Street pedestrian mall in the heart of downtown Shanghai.
For China, it’s purely business
China has made no secret about its ambitions to better itself for the sake of its citizens, and this has struck fear into many Western nations, not least of all the United States, which fears it will be outrun by China’s growing economy in the coming years. Indeed, Beijing’s policies have led to economic and diplomatic disputes with major global players, and there is no shortage of suspicion in the West of Beijing’s aspirations in asserting and projecting its economic prowess around the world.
China’s rivals on the global stage, mainly the United States and Europe, are wary of what they consider to be Chinese expansionism. The People’s Republic’s foothold in many countries, thanks to its infrastructure prowess, a policy enhanced in 2013 known as the Belt and Road Initiative, was intended to boost its ability to facilitate trade and exports and generate income at home. It is a Silk Route for the modern era. The BRI was initiated under current leader Xi Jinping, who took office in the same year, and while trade wars are what is spoken about at a global level, even though Western observers say that both Xi and the Chinese economy are facing a serious downturn, the image being presented to the world is very much one of a continued drive toward greater trade with the world and more innovation.
Those problematic issues are not initially visible to a visitor to China, but foreign experts have little doubt that the country is in need of a fillip or two, as, despite its immense population, the drop in the birth rate, even seven years after it abandoned the one-child policy, and an aging population are taking their toll on the country’s ability to provide enough people for the workforce. The retirement age in China is 60 for men, and 50 for women.
The COVID pandemic has also taken a severe toll on the economy, and a brief but highly restrictive lockdown enforced at the end of 2022 hit all sectors of the economy hard. Building, production, and tourism were all hit, and the country is still emerging from the effects of the tight government-imposed rules.
In addressing the issue of a dwindling workforce, Liu Xiangdong of the China Center for International Economic Exchanges said that the country was turning to investment in the development of artificial intelligence in an effort to mitigate the shortage.
“AI is going to have to be used much more, as it can help accommodate a decrease in the need to employ people and can take over more jobs and direct more people to the service sector,” Liu said.
With a huge disparity between China’s densely populated and highly developed eastern seaboard regions and its more sparsely populated rural heartlands where investment has lagged, the country will have to focus far more on people in those areas to help boost their economy. Liu mentioned broad interest by Germany to help boost rural development.
What can tiny Israel offer giant China?
The Chinese know what they are good at, but entrepreneurs, innovators, and analysts sent out a clear message in many meetings and briefings that they are eager to continue to learn from others how to plug gaps in their knowledge and boost their abilities to better themselves to be better at everything they do.
The Chinese want to get to the bottom of what it is that tiny Israel and its concentrated and highly developed brains trust can offer them to be able to change tack and gain an ability to think outside the box, something they do not recognize as an inherent part of their natural mindset.
It’s the unconventional thinking that somehow fascinates China – something that it considers Israel to be good at.
The cultural differences are stark. China follows a very rigid and disciplined ethos in learning and in life, where respect for elders and for a hierarchy is almost sacrosanct. It is a form of religion in a society that does not appear to ascribe much importance to amorphous deities. A very high emphasis is placed on excelling at schools and universities, and with relatively so few children per household, the pressure on pupils and students to succeed is very high. A huge emphasis is placed on the study of the sciences, as only the best graduates can expect to land leading jobs in the lucrative hi-tech sector.
It’s a stark contrast to Israel, whose education system is struggling to force all schools across some sectors to teach even basic levels of mathematics and English, whose absence in the curriculum is a sure way to enshrine poverty and deprive the state of tax revenues.
Israelis may look at China and wonder what it is that a country of 10 million people – less than half the population of Beijing – could possibly offer such an industrial giant. The Chinese are very open about what they think Israel and other technologically advanced countries can offer them to be able to thrive.
Israel is a country where the lifestyle is so informal that it is not strict in enforcing rules and regulation – quite often to its own detriment – and people often flout conventional behavior, sometimes leading to quite embarrassing social situations, but it fascinates the Chinese.
But questioning norms and rules and often refusing to accept them point-blank; arguing and probing to find possibly a better way to do things – sometimes at the risk of being accused of trying to reinvent the wheel – are a source of intrigue, even admiration, rather than ridicule. Whether it is brainstorming, argument for argument’s sake, questioning one’s elders, or not being afraid to challenge the boss while aiming to solve a problem, it is something the Chinese would very much like to fathom and to adopt and adapt.
Ruyu Wang, director of communications for drug discovery firm XtalPi, put China’s abilities into perspective and hinted where the Israeli way of thinking might fit in.
“China may not have written a lot of the groundbreaking AI papers or GPT algorithms, but we’re good at applications; we’re good at taking those inspirations and applying them to specific industries.... [This is how] we can actually gain an upper hand in applying those technologies,” Wang, a Beijing native who spent several years studying and working in Boston, said during a tour of Haidan Park, one of the Chinese capital’s major centers for science and innovation.
XtalPi uses its AI and automation platforms to speed up the isolation of the best molecule candidates for drug development by other pharmaceutical firms, significantly faster than has been possible through traditional methods, so that they can be analyzed further for future drug developments, and is one of many firms operating in leafy Haidan Park, which is an area many Chinese hi-tech aspire to work at.
To help China make the advances it seeks, two joint endeavors have been established. One is the China-Israel Innovation Park (ICP) in the hi-tech city of Changzhou, about an hour’s flight from Beijing, and the other is the China-Israel Innovation Hub (CIIH) in Shanghai.
The ICP has a strong presence on the ground in real estate, but it is not resting on its laurels and is adding plush high-rise offices for firms whose aim is to embrace Israeli partners in joint ventures for research and development branches in the city, which has been labeled as one of China’s most successful innovation centers. ICP is a joint venture with the Israel Innovation Authority and welcomes guests to its shiny compound with plenty of Hebrew signs and slogans.
Israel is not the only foreign partner in Guangzhou, a city of some four million people, and the city has also invited other countries to set up their own hubs, including Germany, Switzerland, and Japan.
Eran Gal-Or, who moved to China several years ago to help found the Technion-Israel Institute of Technology’s branch the Guangdong Technion-Israel Institute of Technology, and subsequently opened a start-up that recycles food waste, spoke of the advantages that working within the framework of an officially sponsored innovation park affords entrepreneurs. An organized body is absolutely necessary to make things work and to be able to gain funding, he said.
“If you present yourself as a start-up company, nobody will look at you, but if you say you are an Israeli start-up company working in a Chinese-Israeli innovation park, there is a lot of interest... from investors,” Gal-Or explained.
The CIIH is home to several Chinese firms and start-ups that collaborate with Israeli innovators and entrepreneurs, and one industrial design studio owned by Israeli Roy Grinfeld. It designs bicycles made of advanced materials and manufactured according to the most modern methods.
Grinfeld, whose wife, Aviv, runs an adjacent dance studio, has lived in Shanghai for several years and applauds the way in which he, as a foreign entrepreneur, has been welcomed by the Chinese authorities.
“We get tax breaks, any help we seek to be able to do business here,” he said almost glowingly of the local support that is provided to his small enterprise.
He also hailed the superior product quality of Chinese makers compared to other countries. Because of the most recent pandemic lockdown, which compelled foreign clients to take the manufacturing of their bicycles to Eastern European countries, the quality of the products that came out of the factories did little to enhance his company’s reputation, and he was pleased to have the work done back in China.
Thinking big
It’s unlikely, these days, that there is a home anywhere in the world that does not have at least one item that has been made or designed in China. The People’s Republic has, for many years, been considered the world’s factory, but China is now outsourcing some of its own industrial production to countries in the region, as it looks to transition slowly from a production-based economy to services, and boost its use of advanced technologies.
While major policy decisions over what the country needs in order to maintain its position as a world leader may filter down from the top echelons, it is up to the entrepreneurs down the chain of command to implement those business endeavors by using their acumen and initiative while not shying away from enlisting foreign help.
The imposing Great Wall of China may be a monument to a formidable past, and while it was meant to keep enemies out, these days other countries fear that China is encroaching on their patch.
China may be a giant, but it is far from lumbering. When a business opportunity presents itself, you can be certain that China will be there to vie for a piece of the action.
Such is the case of the Haifa Bay Port which was built by Chinese contractors (and delivered six months ahead of schedule, probably a unique event in the annals of Israeli infrastructure building).
The modern container port is run by Shanghai International Port Group, but is owned by Israel. Over years, and as a result of US pressure, and following experiences elsewhere, some Israeli commentators and officials raised fears that allowing Chinese control of the port could pose a security risk to Israel. This has been dispelled in a report by the Institute for National Security Studies which points to a number of factors, not least of which is that the efficiently run facility works to Israel’s benefit.
“A balanced policy must learn from past events but must not rely only on previous experience. Rather, it should look at the present and the future... while balancing between economic and security needs,” Tel Aviv-based INSS said in its report summary.
It will also not go unnoticed by Israelis that most electric vehicles they see around them – if they aren’t already driving one themselves – are Chinese.
Industry statistics show that China is set to become the world’s largest car exporter by the end of this year, and the vast majority of them will be EVs. Although still with a track record that is in its infancy, the cars’ performance suggests that they will endure and are here to stay.
The huge influx of these new vehicles is certainly a worry for the world’s other major carmakers in Japan, Europe, and the US, and European Commission President Ursula von der Leyen has warned that Chinese state subsidies are giving the country’s carmakers an unfair advantage that artificially allows them to lower the prices of Chinese EVs. She has ordered an inquiry that appears likely to propose imposing import tariffs to protect other carmakers.