There is No Rice without Water: Investment Opportunities between Israel and China

November 28, 2013

Outbound Investment (Israel)

water tech

Water – Earth’s most precious resource. We often forget about the scarcity of water. Did you know that 20% of the world’s population faces water shortage – in particular in China? Beijing, China’s capital has more than 20 million inhabitants and possesses only 10% of the average water resources per capita.

A 2011 HSBC report entitled ‘China’s Rising Climate Risk’ warns that nine Chinese provinces “suffer from extreme water scarcity.” It cautions that 14 out of 31 provincial economies “could be at risk from water stress,” since they rely heavily on water for everything from power generation to manufacturing.

In a recent report, the international accounting firm PWC advised according to the United Nations, China is one of 13 countries suffering from serious water scarcity, since China has 21% of the world’s population, but only 6% of its freshwater. Overall, China’s per capita availability of water is just 25% of the world’s average, and more than 400 Chinese cities are short of water. Severe pollution has compromised the quality of the limited water supplies in these and many other emerging nations. Moreover, climate change only intensifies the uncertainty, not least by making rainfall patterns increasingly unpredictable.

China is eagerly looking for technological related solutions and has put a great interest in Israel. Israel was able to win its battle with nature and to transform Israel (which is arid in most of its geographical area) into an oasis.

In his recent trip to China, Prime Minister Benjamin Netanyahu stated, “If we offer a marriage between Israeli technology and Chinese manufacturing and global marketing capabilities, we can have a winning combination” referring, among others, to Israeli water technologies.

The Israeli water industry is today recognized as a global leader in the water arena thanks to breakthrough technological innovations in areas such as desalination, drip irrigation, and water security.

In the recent water technology conference which took place in October this year, Israeli Minister of Economy Naftali Bennett advised: “Israel was not blessed with water. We don’t have much water in Israel. We’ve got a lot of desert so we had to generate our own water. Over 50% of our municipal water is desalinated water. 80% of the agriculture water is re-used.”

A great example of implementing Israel’s water technology in China is the case of IDE whom built China’s largest desalination plant in Tianjin, producing 200,000 cubic meters of fresh water every day.

No doubt, cross border investment and collaboration in water technologies industries is one of the hottest areas where Israeli and Chinese companies can cooperate. China has an urgent need – and Israel can provide the technology.

Amit Ben-Yehoshua is a dual citizen of the United States and Israel and is licensed to practice law in California and Israel. Amit holds a Master Degree in Chinese law from Tsinghua University of Beijing and serves as a Senior Counsel at Da Cheng Law Offices, Asia’s largest law firm. Amit can be reached at amit.ben-yehoshua@dachenglaw.com.

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