Chinese Investment Fund Bans New Investments in Israel
The Chinese investment fund “Bailee Vision” has classified Israel as a “high-risk zone” since the outbreak of the war on Gaza, based on restrictions imposed by Beijing on new Chinese investments there.
According to press reports, an Israeli company belonging to one of the settlements in the border area with Lebanon, specifically Kibbutz “Hanita,” is suing the “Bailee Vision” fund under Chinese control for refusing to purchase their remaining stake in an eye lens factory following losses and a ban by the Chinese government on new investments in Israel.
The Israeli company is demanding compensation of $11 million from the Chinese fund, which controls 80% of the Hanita Lens Factory, accusing it of refusing to exercise the option to purchase the remaining shares, according to an official lawsuit filed in Tel Aviv court.
In a response letter attached to the lawsuit, the Chinese fund stated that since the outbreak of war in Israel, Beijing has classified Israel as a “high-risk zone” and imposed a ban on any new Chinese investments in its territory, making the execution of this option impossible.
The fund wrote in the letter: “Since the outbreak of the war, the Chinese government has classified Israel as a high-risk zone (red category) and banned any new Chinese investment in the country,” confirming that as long as this restriction remains in effect, there is no practical possibility of exercising this option.
According to the lawsuit, in 2021 the company sold a 74% stake in Hanita Lenses, which specializes in manufacturing intraocular lenses for medical use, to “Bailee Vision” for $35 million. Of this amount, $25 million was paid to company members, in addition to another $10 million injected into the company.
As part of the agreements, the Chinese fund granted the remaining minority shareholders the option to compel it to purchase their remaining shares for approximately $9.5 million, now valued at approximately $11 million, by early December 2025.
The Israeli company alleges that it has been excluded from company management, which it says is now centrally managed by representatives of the Chinese owner.
However, the fund cited two reasons for refusing to proceed with purchasing the remaining shares: severe operational losses and what it described as the Chinese government’s ban on investment in Israel since the war.
The war launched by Israel on the Gaza Strip on October 7, 2023, had a direct impact on foreign investments, as its hostile and ongoing policies created a high-risk environment for investors.
This move reflects Beijing’s growing caution toward Israel. Despite the volume of trade exchange with Israel amounting to $16 billion, China clearly prioritizes reducing political risks over individual projects, especially amid regional escalation and pressure from the United States.
Among the most significant implications of this decision is that China considers the investment environment in Israel unstable due to the war, which threatens its existing investments and makes it avoid injecting new funds. Moreover, the decision reflects Beijing’s response to Israeli military escalation in Gaza, as China attempts to show a different position from the West through indirect economic pressure on Israel.
China may also redirect its investments toward other countries in the region such as Saudi Arabia or the UAE.
In a related context, press reports mentioned that Chinese authorities ordered local companies to stop using cybersecurity software developed in both the United States and Israel.
The list of banned companies includes the Israeli company Check Point Software Technologies, in addition to American companies such as Broadcom, VMware, Palo Alto Networks, and Fortinet.
Chinese authorities expressed concern about the possibility of these programs collecting and transmitting confidential information abroad, threatening the country’s security.
With escalating trade and diplomatic tensions between Washington and Beijing, both sides are competing for technological superiority. As a result, China seeks to replace Western technologies with local alternatives.
