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Israeli business incubator launches in China

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Friday, October 7th, 2011

Rapidly growing Israel-China link includes new industrial initiatives and a plan to teach Israel studies at Chinese universities

“Israeli businessmen are clever, hardworking and serious — similar to Chinese businessmen,” says Eric Zhao, vice director of the investment promotion bureau of the Jiangsu Wujin Economic Zone (WEZ) in Changzhou, China. Zhao was recently in Tel Aviv wooing a group of those very businessmen to invest in a new industrial incubator initiative for Israeli companies in China.

 “We see that Israeli companies are not very large, but have high knowledge and strong growth potential,” he tells ISRAEL21c. “For example, yesterday we saw that in Israel they use GPS differently than in China. They add real-time information to communicate with other users. We would like to attract this type of project to China because the market is huge.”

 Business, defense/security and academic alliances between tiny Israel and mammoth China are growing daily, helped along by private Israelis providing liaison packages.

 The Changzhou Industrial Incubation Initiative is one of these. Zvi Shalgo, chairman of the Israeli Chamber of Commerce in Shanghai, founded the PTL Group in 2000 to offer Israeli companies — many of them exporting high-tech products — logistics, manpower and financial services to gain a foothold in China. It’s cheaper to do business in China than in the US, partly because 80 percent of the vast Chinese market is condensed around three major cities, requiring fewer point people.

 Ninety projects later, PTL comprises seven separate enterprises of which the latest is the incubator. So far, it has two production lines running, Shalgo tells ISRAEL21c. One manufactures industrial coffee grinders; the other is LycoRed, a nutritional supplement manufacturer. Last month, an Israeli medical device company started building a factory in WEZ’s dedicated area for this type of industry.

 Wujin, strategically located between Nanjing and Shanghai, is the strongest district in the Changzhou region, Zhao explains. Of Changzhou’s 80,000 businesses, 54 are branches of Fortune 500 companies. There are 25 universities, plus the massive Changzhou Science and Education Town, where tens of thousands of students study vocational skills needed in the industrial zone, such as welding and machining, IT and animation.

 “The government has a new capital fund of $150 million to encourage foreign investment,” says Zhao. Tax breaks for the first few years, assistance in recruitment and patents, and even schooling and healthcare plans for foreign investors’ families are part of the draw.

Click here to read the full story by Israel21c