“Israel Doesn’t Have to Choose Sides in the Hegemony War Between the U.S. and China”

“Saying that we must choose sides between the U.S. and China is irresponsible,” Amir Gal-Or, managing partner of Infinity Group, an Israeli-Chinese venture capital fund that invests in companies in both countries, told Calcalist reporter Meir Orbach during an interview at Calcalist and Psagot's Conference Call online event. “We need to make adjustments and pay attention to American sensitivities to things like defense or infrastructure projects but, in most cases, it is not about choosing sides,” Gal-Or said.

Asked how China is now coping with the coronavirus (Covid-19) pandemic, Gal-Or said that it feels like the worst is behind them. “The Chinese government plans to return to routine as fully as possible given the decrease in production demand, the limitations on global travel, and the hegemony war,” Gal-Or said. “Our activity in China has resumed completely, we’ve started closing deals and making investments. They don’t have that process that we’re going through in Israel nowadays, where things are moving slowly. There is a general instruction to follow up and complete all prior obligations, money is coming in on a case by case basis, according to where it is needed, but everyone is aware of the fact that global demand is down, that there are problems with the U.S., and that the market will be impacted by it.”

It feels like Israel is caught in the middle between China and the U.S. is it Israel or is the whole world in this predicament?

“Israel is not alone and it is not a decision that the government must make. Apple, on the one hand and the British government, on the other, are facing dilemmas as we speak. Apple is an American company with a massive market in China, its factories are there and it cannot be forced to choose one of the sides exclusively. It needs to find solutions and there is no question adjustments have to be made,” Gal-Or said. “Asian and European countries are in the same boat. The U.K. is in intensive talks with the U.S. on the 5G network. Everyone is under immense pressure to reduce their dependence on China. Israel, as a U.S. ally, is too.”

Will tech companies back off or continue seeking investors from China?

“Tech companies need to look at China as a player that is not going anywhere and has an immense impact on their target market regardless of the results of the hegemony wars between the two superpowers,” Gal-Or advised. “The situation still provides valuable opportunities. Chinese industries are better at some things than those in the West and Tech companies can work with them in third-country markets. In some cases, Chinese companies may be happy to work with Israeli companies as subcontractors rather than as upfront partners. Companies can create parallel brands for the Chinese markets or split the company in two, or play around with ownership. Solutions do exist.”