Bethel Finance: Israel deepens economic ties with China

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The Minister of Finance and his Chinese counterpart this morning executed an agreement in a volume of more than NIS 1 billion for the export of Israeli water technologies to China

Minister of Finance Dr. Yuval Steinetz and the Chinese Finance Minister Xie Xuren, signed a financial protocol in a volume of more than NIS 1 billion (US $ 300 million) for the export to China of Israeli water technologies for agricultural use. Attending the ceremony were Deputy Minister of Finance Rabbi Yitzchak Cohen and Accountant General Michal Abadi-Boiangiu, CPA, Adv.

Minister of Finance Dr. Yuval Steinetz told his Chinese counterpart that “Israel views the deepening of economic ties between the two countries as a most import strategic goal. Whenever we meet, the volume of trade between the two countries increases and I am hopeful that this trend will persist for the future too. I want to thank you for signing this joint protocol”.

The Minister of Finance invited his Chinese counterpart to visit Israel. The Chinese Minister accepted the invitation, saying: “I will find the opportunity to come to Israel for a visit”.

The Chinese Minister of Finance Xie Xuren said at the signing ceremony “We are very pleased with the economic cooperation with Israel; and at our meeting, we will think what more can be done to further boost the volume of trade between the two countries. Economic relations between the two countries are increasing and growing rapidly to our satisfaction and we intend to take further steps to reinforce this trend. Thus, both the application of numerous projects in the agricultural and technological domain, in which Israeli companies are involved, is highly significant to our economic relations”.

Another matter discussed at the ministerial meeting was the possibility of the export of natural gas from Israel to China. The Chinese Minister expressed interest in such a possibility, saying that talks would soon be taking place on that matter.

The financial protocol is an agreement between the Governments of Israel and of China for setting up a special line of credit for financing trade and Israeli investment in China. The protocol enables the insurance of long-term loans granted to export transactions from Israel on conditions that give the Israeli exporter an edge over his competitors worldwide.

Execution of the protocols forms part of the implementation of China’s 12th five-year plan which includes a stage of development for promoting and developing the water economy in five provinces in the north-west of China: Shaanxi, Gansu, Qinghai, Xinjiang and Ningxia, all in light of the severe water shortage in China. The product of the five provinces amounts to some 31 billion dollars and the population numbers some 97 million. Pursuant to the financial protocol, the Chinese Ministry of Finance will purchase Israeli technologies for the farming communities in the selected provinces. The protocol agreement will enable execution of projects in a volume of more than NIS 1 billion (300 million dollars), in which the Israeli component will constitute at least 50% of the project’s value. Integration of the financial protocol into the Chinese five-year plan indicates acknowledgement of Israeli technological capabilities and the importance of the economic and political relations between the countries.

The current protocol joins 3 precedent protocols that have been signed with the government of China since 1995. Altogether, these existing protocols amount to a billion dollars. Under the terms of these protocols, some 220 transactions have taken place in a volume of more than 600 million dollars, most of them in the domain of medical instrumentation and communications. In light of the success of the previous protocols, and due to the Chinese government perceiving the need to promote and develop the economy of water for agricultural use, the Israeli and the Chinese Ministries of Finance have agreed to dedicate the current protocol exclusively to technologies in the domain of water and irrigation.