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Businesses China The Almighty Buck United States

Blocked From US Tech Investing, China Goes To Israel Instead (cnet.com) 73

Struggling to seal deals in the United States as regulatory scrutiny tightens, Chinese companies looking to invest in promising technology are finding a warmer welcome for their cash in Israel. From a report: Unfazed by this change, which was brought on in part by a new administration focused on US protectionism, Chinese investors are putting their money in Israeli companies instead. Last year, Chinese investment in Israel surged tenfold to $16.5 billion, a record, with money going to Israeli internet, cybersecurity and medical device companies. In contrast, Chinese investors scrapped a record $26.3 billion in previously announced US deals.
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Blocked From US Tech Investing, China Goes To Israel Instead

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  • by will_die ( 586523 ) on Friday May 12, 2017 @02:06PM (#54406801) Homepage
    First you had claims about use of a time machine to get access to servers now there are claims that trump went back into the past and implemented restrictions that are not even in place now.
    How is this happening and how do I get a ride?
    • by geek ( 5680 )

      Blaming the sitting president is sure to get clicks from at least 50% of the viewers.

      • You're being very optimistic about the general viewer-base there.

      • can u say "hire americans".
    • by ShanghaiBill ( 739463 ) on Friday May 12, 2017 @02:38PM (#54406971)

      When deciding whether or not to invest in a country, any reasonable company would consider not just current law, but likely future restrictions and attitudes as well.

      According to Trump:
      1. If American companies create jobs elsewhere, that is bad for America and good for foreigners.
      2. If foreign companies create jobs in America, that is also bad for America and good for foreigners.

    • by jandersen ( 462034 ) on Friday May 12, 2017 @02:57PM (#54407043)

      First you had claims about use of a time machine to get access to servers now there are claims that trump went back into the past and implemented restrictions that are not even in place now.

      Investors are very sensitive to what they think is likely to happen in the near future - with Trump going on about 'taking on' China imposing enormous tariffs etc, what did anyone expect Chinese investors to do? Ladle the cash into the US until suddenly a tariff hits them? Just imagine how fast foreign companies would pull all their investments out of China, if their government started talking about stuff like that. It's probably called due diligence or something like that. Or common sense.

    • him and Sanders. TPP probably would have allowed the money to flow in, and it was Trump & Sanders demonizing the TPP that stopped it (If you honestly think a little thing like overwhelming public opposition was gonna stop the TPP you need to read up on how NAFTA as passed).

      Not that I'm a Trump fan, but TPP is no friend of me. As an IT worker it would accelerate outsourcing and H1-Bs taking what little jobs are left. Said it before, will say it again, you can't compete with India. Hell, I can't compe
  • by Anonymous Coward

    Israel has second hottest startup / VC culture after Silicon Valley. High quality advanced tech. Smart move by the Chinese. Background info, with China's economy slowing, and difficulty moving cash overseas to protect it from the government, investment is a smart way to transfer the cash, and with Israeli techs excellent record, there's a high chance of a tidy profit to boot.

    • Every investment culture has its own quirks. I haven't been in an investment scenario with Israeli tech companies but I do know they tend to be quite arrogant. And yes they consider contracts as a sort of weapon.

      With Chinese you have to have the business model down pat. The contract almost doesn't matter. They pay attention to cash flow and as long as that is going along agreeably then you will be fine. They are often also quite a bit more sophisticated than they might appear.

  • Contracts (Score:5, Interesting)

    by psergiu ( 67614 ) on Friday May 12, 2017 @02:21PM (#54406885)

    I have dealt with Israeli companies before. Everything is fine as long as you pay very carefully attention to the wordings in the contracts. You need both legal and technical teams to go over each revision.
    Both their legal and technical teams are usually very good, and once the contract is signed, they keep their part of the agreement. To the letter.
    I wish the Chinese good luck.

    • by geek ( 5680 )

      Dealing with China is worse. First you sign the contract, then they start the negotiations. I've never hated business dealings as much as the ones I deal with from China.

      • Re:Contracts (Score:5, Interesting)

        by ShanghaiBill ( 739463 ) on Friday May 12, 2017 @02:56PM (#54407041)

        Dealing with China is worse. First you sign the contract, then they start the negotiations.

        You are doing it wrong. Chinese courts are so biased and dysfunctional that written contracts are basically unenforceable. They are a waste of time. Instead have a written agreement in English, and put the money in an escrow account under American jurisdiction. When they deliver the product, and it meets the spec, you release the escrow funds. If they don't deliver as agreed, then their only option is to sue you in America to get their money. If they won't agree to these terms, then go back to Alibaba and spend 5 minutes finding an alternative supplier.

        Chinese don't even trust each other, so escrow payments are common, and every significant supplier is familiar with how they work.

      • Korea is the same way.
    • by Anonymous Coward

      I would add that you should perform due diligence and pay close attention to any contract you sign, no matter who it is. I've heard that in China it's standard procedure to try to write contract with as many loopholes as possible to screw your partner, but that is second hand. I would advise the Israelis to be very careful also. The Chinese also like to steal technology as well.

    • by Anonymous Coward

      As opposed to where exactly? Every place on earth is like this. No vendor is not going to screw you if they contract terms let them. That's why lawyers have jobs.

      • Re:Contracts (Score:4, Interesting)

        by ShanghaiBill ( 739463 ) on Friday May 12, 2017 @03:08PM (#54407099)

        As opposed to where exactly? Every place on earth is like this.

        No they aren't. The level of shady business behavior in China is way beyond what you experience in America.

        That's why lawyers have jobs.

        Per capita, America has 20 times as many lawyers of China. In China, the courts are not effective at enforcing contracts, so lawyers aren't much help.

        There are plenty of stories about naive foreign companies trying to do business in China, but my favorite is when BAT (British American Tobacco) first entered the Chinese market. At first, they were surprised to see sales higher than expected. Sales continued to grow for several months, and they ramped up production. Then, after six months, sales plummeted to zero, and never recovered. They took huge losses on infrastructure and unsold merchandise. It took them a long time to figure out what happened. Their sales were high because their products were being purchased by their competitors, and stored in damp warehouses, where they grew stale and moldy. Then after six months, all the accumulated rotten cigarettes were dumped onto the wholesale market, crashing the price, and destroying BAT's reputation for quality.

    • From my experience in the Read instruction manual, China is an expert on the exact wording of the. I cannot see what the problem.

  • by Anonymous Coward

    Israel needs some investment. I don't think the chinese are up to the standard of Israeli lawyers though.

  • New Trade Agreement (Score:3, Informative)

    by Thelasko ( 1196535 ) on Friday May 12, 2017 @02:36PM (#54406955) Journal
    There's a new trade agreement that allows China to open banks in the US. [bbc.com] That completely changes the landscape for Chinese investment in the US.
  • by dskoll ( 99328 ) on Friday May 12, 2017 @02:50PM (#54407019) Homepage

    ,,, we've been eating at their restaurants every Christmas for years. Mazel Tov!

    • I agree. Maybe the Chinese can start being the leading provider for foreign aid to Israel too, so the U.S. can stop such funding and use that money to build a wall instead.
  • and so rather like to go to Israel than to the US ;-)

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