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China now Israel’s third-largest destination for exports

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Thursday, December 8th, 2011

 

Israeli companies are increasingly looking eastward to compensate for falling demand from Europe and the United States.

China was Israel’s third-largest export destination in the first three quarters of 2011, showing evidence that Israeli companies are increasingly looking eastward to compensate for falling demand from Europe and the United States, the Israel Export Institute reported Wednesday.

The People’s Republic of China received $1.65 billion worth of exports from Israel between January and September, placing it behind only the United States ($9.04b.) and the United Kingdom ($1.88b.) and just ahead of The Netherlands and Germany.

China would overtake the UK as Israel’s second-largest export destination by the end of this year, the report said. This would complete a rapid rise for China, which ranked number five in the first three quarters of 2010.

“The changes… reflect the growing importance of the Chinese economy to Israeli exporters,” Israel Export Institute chairman Ramzi Gabai said in the report.

The institute intends to make every effort to encourage more exports to emerging markets in Southeast Asia and South America as those to Europe and the US decline, he said.

Turkey rose one place to sixth in the first three quarters as demand for Israeli exports rose strongly despite political tensions between the two countries. Israel sent $1.43b. worth of exports to Turkey, up 39 percent compared with the corresponding period last year. It also marked the largest rise in demand from any of Israel’s top 20 export destinations. According to the institute, this was mainly a result of increased need for chemicals and refined petroleum products, which constitute about 70% of Israeli exports to Turkey.

Meanwhile, Israel is set to expand trade with another emerging Southeast Asia power, Vietnam, after the two countries’ finance ministries agreed Wednesday to add $100 million to the credit line of the 2007 Israel-Vietnam Financial Protocol.

This brings the total credit line to $250m.

Representatives for the two ministries signed the agreement in Hanoi on Wednesday in the presence of President Shimon Peres, who is leading a delegation to the country, Vietnamese President Troung Tan Sang and Vietnamese Deputy Finance Minister Tran Xuan Ha.

The Financial Protocol outlines how loans are used to finance commercial contracts between Vietnamese buyers and Israeli exporters. Under the terms of the protocol, the Vietnamese Finance Ministry has master loan agreements with Bank Hapoalim, Bank Leumi and BNP Paribas Israel.

Israeli Finance Ministry Accountant- General Michael Abadi-Boiangiu said the ministry was deliberately placing an emphasis on countries like Vietnam that would be key export destinations in the future. Vietnamese demand for Israeli products was already strengthening, mainly in the fields of hi-tech and agriculture, he said.

“This is an opportunity for Israeli exporters to penetrate these markets, given that Israeli exports have a real added value in that they contribute to social and economic development,” Abadi-Boiangiu said.

“Our experience teaches that the financial agreement strengthens the connection with the emerging Vietnamese market and enables Israeli exporters to increase their exposure to this market.”