Palestinian-Israeli conflict escalates, China's new energy car companies panic?
Chinese companies under Israeli fire.
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The Palestinian-Israeli conflict has escalated
The Middle Eastern "powder keg" exploded again.
On October 7, 2023, the Palestinian Islamic Resistance Movement (Hamas) announced military action against Israel, firing approximately 3,500 rockets at various locations in Israel.
In response, Israeli forces have also launched heavy airstrikes into the Hamas-controlled Gaza Strip, and the Israel Defense Forces have declared a state of war, claiming to "impose an unprecedented price on the enemy."
This is the most intense escalation of the conflict between Palestine and Israel in recent decades, and it is likely to intensify. According to media reports, the death toll on both sides has exceeded 1,000 so far. More than 700 were killed in Israel and more than 400 on the Palestinian side.
▲Source: Xinhua News Agency
Speaking of which, the Palestinian-Israeli conflict is the world's longest and most complex regional problem. This is not a simple "turf" issue, which is mixed with multiple complex factors such as history, religion, ethnicity, and geopolitics.
Here's a bit of history. Around 1000 BC, the Jews established the State of Israel. But by 70 AD, the Jews were expelled from Palestine by the Romans, beginning a nearly 2,000-year "diaspora." At the end of the 19th century, with the rise of the Zionist movement, Jews began to migrate in large numbers to Palestine.
The conflict between the Arab and Jewish peoples, which had lasted for thousands of years, broke out in 1947. That year, Israel was approved as a state, and Jerusalem was "divided" under a UN resolution.
In the eyes of the Jews, the Arabs are "robbers who rob the wealth of their ancestors", because Palestine is the homeland of the Jews, their "promised land", and they are simply ending their millennial exile and returning home. The Arabs, on the other hand, criticized the Jews as "doves occupying the Magpie's Nest."
The two sides at loggerheads chose war to solve the problem. After Israel announced its establishment in 1948, five large-scale wars broke out between Israel and Arab countries around the Palestinian issue, and the Middle East became the battlefield of the great power game.
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Chinese companies in Israel
If you only look at the territory and natural conditions, Israel seems to be "weak".
According to the provisions of the 1947 United Nations Resolution on the Partition of Palestine, the area of the State of Israel is 15,200 square kilometres. After several wars in the Middle East, Israel effectively controls an area of about 25,000 square kilometers.
But even this expanded area is only 1/3 of Chongqing. Moreover, there is no oil and gas in its territory, and the desert coverage is as high as two-thirds. With barren land, lack of water, and geopolitical instability, Israel has no innate advantage.
But it is such a "projectile land", but more than 250 high-tech research and development centers have gathered, including the famous Intel, IBM, Microsoft, HP, Yahoo, Google and other global technology giants.
As early as 2018, Israel's total GDP ranked 38th in the world, with a per capita GDP of $40,000, making it one of the 20 most developed countries in the world. Moreover, Israeli high-tech contributes more than 90% to GDP.
Statistics show that among the high-tech companies listed on NASDAQ in the United States, the number of companies from Israel once ranked third in the world. In 2014, Israel ranked first in the world in terms of innovation capabilities.
Why is Israel one of the most tech-intensive regions in the world? This is inseparable from Israel's emphasis on innovation. According to the data, Israel's investment in education has always remained in the range of 9-12% of GDP, which is higher than other developed countries in the world.
According to one statistic, the education rate of Israeli citizens is more than 95%, second only to Sweden in the world. They have 2.5 natural science researchers per 1,000 people, ranking first in the world.
Perhaps driven by a sense of crisis, Israel has formed a world-leading scientific research industry advantage in modern agriculture, water resource utilization, renewable energy, information and communication, biomedicine, medical equipment, etc.
It is precisely because of this that global capital has poured in, and there are also many Chinese companies.
IT Orange data shows that there were 88 investment incidents and 15 mergers and acquisitions by Chinese companies and venture capital institutions in Israel, mainly in the healthcare and advanced manufacturing industries.
▲Source: IT Orange
Taking 2018 as an example, according to the data of Morning Sentinel M&A, Israel's total global financing reached US$6 billion that year, with Chinese investment of US$1 billion, accounting for 17%, and Chinese capital accounting for more than 30% of large-scale investment.
Chinese companies such as Tencent, Huawei, Alibaba, Baidu, 360, Lenovo, and Ping An all operate in Israel. In recent years, Xiyin, which has been very popular, once became the largest e-commerce company in Israel, and Pinduoduo's overseas version of Temu also followed. In recent years, the "China-Israel Industrial Park" has blossomed everywhere.
After the escalation of the Palestinian-Israeli conflict, many people began to worry about these companies: in the event of a larger war, will their business in Israel be affected?
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Should new energy vehicle companies panic?
Compared with these companies engaged in research and development in Israel, what should be more worried is probably China's new energy vehicle companies.
You may not know that Israel has become a gathering place for China's new energy vehicles to go to sea.
According to Gas, the Israeli automotive market sold 24,727 units in August 2023, a year-on-year increase of 20.15%, and the cumulative sales volume in 2023 was 213,000 units. Among them, Chinese car companies in Israel accounted for 15.3% of the market, ranking third.
Focusing on the new energy sector, the share of Chinese car companies reached 43% in August, and BYD, Geely, MG and Ora all performed well.
More Chinese car companies are still pouring into Israel. In September 2023, Xpeng's 750 G9 and international version of P7i were officially shipped to Israel, and Israel also became Xpeng's first stop in the Middle East market.
The entry of Chinese new energy vehicles into Israel dates back to 2019. This year, MG, a subsidiary of SAIC, took the lead in opening up Israel's new energy vehicle market, which is also the first pure electric vehicle in the Israeli market.
After that, Aiways, Skyworth, BYD, Geely, ZeroSport, Jiangling, Nezha, Lynk & Co, Lantu, Extreme Krypton, and Xiaopeng also came one after another. Israel has become an "overseas gladiatorial arena" for China's new energy vehicle companies.
▲Source: Garage 42
Some people may be curious, why do these new energy vehicle brands have a soft spot for Israel?
The first is that Israel needs cars. As a developed country, Israel has an urbanization rate of 93%. And more than half of Israel's population of more than 9.5 million work off-site. This has led to the fact that cars are almost a necessity in Israel:
Two-thirds of households own at least one private car.
Secondly, Israel's new energy vehicle market has full potential. According to the Israeli Ministry of Energy, by 2025, the number of new energy vehicles in Israel will reach 177,000, and by 2028, this number will grow to 656,000. By that time, Israel's electric vehicle sales will account for 35% of total new car sales.
In absolute terms, this market is not very large, but it has a more far-reaching meaning.
According to the Israeli government's plan, from 2030, the country will completely ban the import of gasoline and diesel vehicles, and only limit imports to electric or natural gas vehicles. It can be said that this is a country that firmly follows the new energy route.
More importantly, Israel is one of the most technology-intensive regions in the world, and the world's technology giants and capital value it very much. If which new energy vehicle brand can succeed here, is it easier to get the favor of capital?
At the end of the article, let's go back to the Palestinian-Israeli conflict. Over the decades, countless wars have been ignited in that land. But several wars have also proved that neither the Arab states nor Israel can completely crush the other. There may only be one way out for them -
Peaceful coexistence.