On January 2nd, 2019, AugmentIC CEO Daniella Lang interviewed Michal Berdugo Director at Asia Direct Capital of Poalim Group. Ms. Berdugo received her bachelor's from Hebrew University in East Asian Studies and Political Science. She received a masters degree in law from Bar Ilan University. Ms. Berdugo is an experienced associate director with a demonstrated history of working in the investment banking industry, specializing in China. She supports start-ups entering the Asian market.
Headquartered in Beijing, Asia Direct Capital Group provides consulting and investment banking services tailored to meet individual business needs, requirements and goals. They have extensive experience in helping clients engage the Chinese market from a number of different angles.
This interview has been edited and condensed for clarity.
Daniella Lang: When did your passion for Sino-Israeli relations begin?
Michael Berdugo: I received my bachelors at Hebrew University in Jerusalem in East Asian studies. My studies required me to study a language and I had heard that Chinese was the most difficult language so I decided to give it a try.
DL: How did you begin your professional career in Sino-Israeli relations?
MB: Quickly, I understood that in order to truly be proficient in Chinese I had to move to China and immerse myself in the language and culture. I moved to China and searched for a job that would push my career forward. I received an offer to work as a trade officer for the Israeli embassy in Beijing in the trade attache office. Working there, I began to understand that language isn’t actually that crucial. Rather, I should focus on understanding the culture on a people-to-people level. This cultural understanding gave me the edge to enter the investment field, like finding strategic partnerships and conducting negotiations.
Ironically, today as a professional in the cross border transactional investor space, I always use a translator. I do this primarily because you never want to get money wrong, but also because many Chinese investors speak English.
DL: Can you discuss cultural similarities and differences between Israeli’s and Chinese that stand when conducting business?
MB: I could talk about this for hours. There are many cultural similarities between Israelis and Chinese, but understanding the differences is what enables you to actually conduct business. For instance, in China you must do everything personally (i.e. you must attend the meeting in person) to show your Chinese counterpart that you are making the effort to engage in this deal.
Personality-wise, the Chinese will never say no to you. Once you understand this cultural phenomenon, you will understand what actually means no without them using the word itself. I have also come to realize that us Israelis cannot understand business intent and commitment from one single meeting. On the flipside, Israelis are more to-the-point. If an Israeli company does not think the partnership will work out they will tell you to your face. Guangxi is critical. Israelis do not require that personal flare and effort in a business meeting.
DL: What role do you believe innovation plays in Sino-Israeli relations today?
MB: The Sino Israeli relationship which exists today was born of a mutual desire to leverage innovation. It is very important.
DL: Are there any particular investments fields or markets which you feel the Chinese are particularly interested in?
MB: This is a difficult question to answer because I feel that there are so many exciting emerging technologies at this point in time. I’ll name three.
Smart Transportation: This industry is experiencing a global boom, and Israel has cutting edge technology.
Cyber Technology: Cyber Tech is on the rise. However, it is becoming increasingly problematic due to recent regulations.
AI/Big Data: As in, companies that know how to use customer information to increase sales. China has a mammoth market and learning to leverage its market has tremendous added value for investors.
DL: What do you believe are the most imminent future challenges ahead for Sino-Israeli relations?
MB: Unfortunately, from my perspective, this is a long and growing list.
U.S. and Israeli regulations
The economic cycle: an imminent economic downfall, wealth is decreasing and this will negatively affect investment.
Technology aspects: The Chinese government is providing significant investment and resources to ensure that Chinese firms can build their own technology. If China has a successful and thriving tech ecosystem, then Chinese investors will stop looking for foreign technologies and startups.
DL: Where do see Sino-Israeli relations in 5-10 years in terms of business and economic relations?
MB: In the next two years, I predict hardship stemming from the economy and stricter government regulations. In the long run, I see growth.
DL: Most important piece of advice for Israelis or Chinese trying to enter the field?
MB: Language is not the most important component of entering this space. In fact, it is worthwhile to attain experience through an internship. I got an internship in the Ministry of Economy office in my last year of studies. Overall, experience is the most important prerequisite.