From S.R.
Not too long ago, China and Israel couldn't keep their hands off each other. Now, declining relations have come with a sharp drop in trade. A new report examines this.
He said. She said.
"The first possible explanation for the decline in trade with China emphasizes internal factors in Israel over the last trade year."
A new report cites a sharp decrease in Israeli trade with Beijing.
Focus
The Numbers and the Reality
Many years ago, Mark Twain used to say "lies, damned lies and statistics." The idea was that numbers could bolster any weak argument.
Well, these days the numbers show something unusual: China has reduced trade with Israel.
A new report explores the decline in the commercial relationship between Beijing and the Jewish state. Israeli researcher Tomer Fadlon says 2023 marked a "sharp decline" in trade between the two countries. This, after years of steady increase.
"In 2023, imports declined by 15 percent compared to 2022, from a peak of $13.1 billion to $11.2 billion, after many years of gradual increases and a dramatic jump in 2021 and 2022," Fadlon said in a report titled "Israel-China Trade Slump: Turning Point or Correction?" For an overall perspective, in the decade from 2013 to 2022, imports from China rose 130 percent, from $5.6 billion in 2013 to $13.1 billion in 2022."
The report, for Israel's Institute for National Security Studies, raises more questions than it answers. Fadlon begins by dismissing the obvious. He said the Houthi war in the Gulf of Aden, ignited after the Hamas invasion of Israel in October 2023, was not the main factor in the trade decline. He said the drop had already been seen at the start of the year.
First some background: In 2020, China became Israel's second largest export destination after the United States. Three years later, Israeli exports to China fell to third place, below those to Ireland. The report said Israeli exports to China peaked in 2018 with $4.77 billion, and from then on stagnated.
At the same time, Chinese exports to Israel dropped by 15 percent from 2022 -- to $11.2 billion. The decline took place despite a surge in Israeli imports of Chinese electric vehicles.
In contrast, Israeli exports to Hong Kong rose by 30 percent to $1.09 billion, breaking the $1 billion mark for the first time. Fadlon cited statistics by the Hong Kong Customs Department that most of the increase Israeli trade stemmed from telecommunications equipment. That figure was expected to rise in wake of an agreement for Israel to help establish a network of health centers on the Chinese island.
So why the sharp decline in Israeli trade to the Chinese mainland? The report does not cite the worsening political relations between Beijing and Jerusalem, fueled by Israeli capitulation to U.S. pressure against selling technology to China. China’s fury increased over the last few years with Israeli media reports that Beijing has been spying on the Jewish state.
Instead, the report says the decline in trade could be linked to Israeli instability in 2023. Fadlon cited the massive anti-government demonstrations followed by the Hamas war, both of which also led to a decrease in Israeli commerce with other countries. A smaller decline was recorded in Chinese exports to the West while sharply increasing trade with the Gulf, India and Russia. In Israel, trade with the United States has risen.
"The first possible explanation for the decline in trade with China emphasizes internal factors in Israel over the last trade year. 2023 was characterized by economic, military, and political uncertainty in Israel," the report, dated April 4, said. "For most of the year this was caused by the judicial reform plan, and in the last quarter, by the war in the Gaza Strip."
Other explanations for the trade drop included the end of Covid-19 pandemic, which increased consumption. Until 2023, Beijing exported a massive amount of such goods as masks, gloves, clothing and electronic equipment.
"From this perspective, the decline that occurred in 2023 comes in the context of several years of dramatic increases that do not represent normal years of trade between China and Israel," the report said. "However, it is important to note that the decline in trade between China and Israel is sharper than the decline in trade between China and the rest of the world."
In the end, Mark Twain would have just muttered "statistics."
Ticker Tape
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