Zhang Xiaoqiang, CCIEE Executive Vice Chairman and CEO, is Met with H.E. Irit Ben-Abba, Israeli Ambassador to China

On May 13, Zhang Xiaoqiang, Executive Vice Chairman and CEO of CCIEE, is met with Irit Ben-Abba, Israeli Ambassador to China, at the embassy of Israel in China upon invitation, exchanging views on issues such as China-Israel economic and trade cooperation, global economy and new development dynamic featuring “dual circulation”. Yuan Youwei, New Economy Forum Secretary-General and Deputy Head of CCIEE’s External Affairs Department, Shen Jiawen, Researcher of CCIEE’s Innovation Studies Institute, Esti Ayalon-Kovo, Economic Counsellor and Director of Economic Division of Israeli Embassy in China and Efrat Shitenberg, Deputy Director of Innovation Division of Israeli Embassy in China were present at the meeting.

Irit Ben-Abba welcomed the delegation of CCIEE and briefed them on current economic situation in Israel. She said that since the establishment of diplomatic relations between Israel and China, over the past three decades China and Israel have kept deepening the bilateral political, economic, academic and cultural exchanges. The year of 2017 witnessed announcement of innovative comprehensive partnership between China and Israel, which lifted the bilateral relationship to a new level. Economic and trade relations between the two countries are robust, and there are a large amount of Chinese investments in Israel, especially infrastructure projects. She believed that there are going to be more chances for bilateral cooperation.

Indicators of Israeli economy in 2020 was in good shape mainly because the employees in high-tech industries worked from home during the pandemic, reducing the cost while improving efficiency. Although industries like tourism, entertainment and catering took a large toll, other sectors performed well due to working-from-home approach. In health sector, Israel is trying to provide solutions by offering healthier food and cleaner energy.

Israel took high expectation for its economy in 2021, against which the biggest challenge is to effectively reduce the government fiscal deficit. During the pandemic, the ratio of debt of Israel government to GDP went up to more than 80% while the GDP growth in 2020 was -2% with the unemployment rate of 26%. But this year, thanks to the progress of vaccination and economic restart, there were signs of economic recovery in Israel.

Zhang Xiaoqiang said that China-Israel trade saw a robust growth against the trend of steep decline in global trade in 2020, adding up to 17.6 billion USD. Despite the trade surplus of China, the bilateral trade can benefit both the business communities and people from the two countries. China and Israel have launched extensive cooperation in agriculture, medicine and healthcare, advanced manufacturing and technology as many Chinese provinces and municipalities have imported Israeli technology and devices, such as water-saving irrigation and healthcare devices. China put forward the goal of achieving carbon neutrality and peaking carbon dioxide emission, which will present potential opportunities to China-Israel technological innovation and capital investment cooperation. Additionally, there are also huge room for China-Israel cooperation in education, culture, tourism and public health. China values relations not only with big countries but also with small countries, such as Israel.

COVID-19 infected population surged worldwide, so it is risky for China to open the border abruptly, despite the control of pandemic within China. China now is actively promoting international cooperation, including completion of RCEP, negotiations of China-Japan-Korea FTA and FTA with Gulf Cooperation Council.

Chinese president Xi Jinping has pointed out in many occasions that China will attach more importance to high-quality development. China will pursue an innovative, coordinated, green, open and sharing development, meeting the needs of Chinese people for better livelihood. Chinese government will further streamline the administration and delegate more power to the market, so as to give a bigger play to market entities. The negative list of foreign investment will be further shortened and business environment will be improved accordingly. The government will continue to advance the internalization of RMB and prioritize and strengthen intellectual property protection. For new business forms like e-commerce and cross-border date transfer, the whole world, including China, is facing numerous challenges. Digital economy calls for universal principles, which presents an opportunity for development. With regard to e-commerce, China kicked off the layout at the very beginning. On the one hand, Chinese government encourages the growth of IT companies to benefit the people along with the advance of relevant technologies. On the other hand, the government endeavored to prevent monopoly of these giants as well as risks caused to financial market and supervision.

Both President Xi Jinping and Premier Li Keqiang stressed for many times that it is a must to accelerate building of a new development dynamic under the new normal. The content of “dual circulation” development dynamic is to enhance domestic economic circulation and remain open to the overseas at the same time. From 1990s to 2000s, Chinese economy depended on import heavily. In 2007, the ratio of foreign trade to GDP stood at about 64% and then decreased year by year to 32% in 2019, only the half compared to a decade ago. Last year the volume of Chinese foreign trade accounted for 15% of the world commodity trade. It is China’s hope that the cake of global trade is getting bigger and bigger and all countries can benefit from it. In the meantime, against the trend of protectionism and lukewarm international trade, it is necessary to bring out the full potential of domestic market.

Innovation is an important driver for quality development. China will continue to increase the investment in research and development to GDP, facilitating technological innovation by measures like increasing fiscal budget, improving incentive mechanism and enhancing intellectual property protection. China faces various challenges in research and development. For example, the significance of basic research has not been fully realized currently and R&D expenditures over-concentrate on technological innovation. Besides, research outcomes face obstacles in being transformed into industrial application.

Belt and Road Initiative is a global effort which requires consultation, contribution and exerting complementary advantages of different countries to achieve win-win cooperation and share benefits. Some have questioned the Initiative and put forward the idea of “debt trap”. By examining the history and reality, it is crystal clear that China and BRI by no means are the causes for the debt problem in relevant countries. But indeed, avoiding risks needs joint efforts of different countries. In addition, BRI projects should not only take into consideration the financial returns, but also the contribution to social progress, such as China’s high-speed railway project. Dividend of development should be enjoyed by the people, rather than the business giants. BRI is open to all and China has signed an agreement with France on cooperation in third-party market. It also welcomes the cooperation with enterprises from the U.S., Japan, South Korea and other countries in third-party markets.

The two sides also exchanged views on investment of fixed asset, population, climate change, as well as healthcare and medicine cooperation.