This article reviews and analyzes trends in trade between Israel and China in 2024, set against the backdrop of the Swords of Iron war and the ongoing trade war. Three key developments stand out compared to 2023. First, imports from China rose approximately 20% in 2024, following an 18% drop from 2022 to 2023. Israel continues to import more goods from China than from any other country, and in 2024, about 15% of all goods imported to Israel came from China. Second, Israeli exports to China continued to decline. In 2024, Israeli...
The risks to Israel’s economy have risen in recent weeks, along with the likelihood of a financial crisis in Israel. This is due to three events that occurred simultaneously: the end of the ceasefire in Gaza and the resumption of fighting, the approval of a problematic state budget for 2025, and political instability reflected in the dismissal of gatekeepers and the return of the judicial overhaul. All these raise many questions regarding the fiscal responsibility of the Israeli government in general, and the financing of the war in...
This article discusses the Nagel Commission report on the security budget and force buildup, which was recently submitted to the prime minister, and compares it to reports issued by previous commissions that have addressed this issue (the Brodet Commission and the Locker Commission). The analysis highlights flaws in the broad mandate given to the commission, its timeframe, the validity of some of its conclusions—both in terms of concept and force building—as well as its omission of critical fundamental issues. While adopting the...
The 2025 state budget, set at NIS 607 billion, was approved by the government on November 1 after contentious debates within the coalition. The government aimed to present a budget that would support the country’s growing security needs and the populations affected by the war while also reducing the deficit and encouraging economic growth. In practice, the approved budget should meet Israel’s security needs, but it is doubtful whether it will address the country’s broader economic needs. The unwillingness to significantly cut...
The tightening of relations between China and Iran is considered one of the main factors preventing the collapse of Iran’s economy, which has been subject to sanctions since the United States withdrew from the nuclear agreement in 2018. This improvement in relations began at the height of the COVID-19 crisis when the two countries signed a long-term cooperation agreement aimed at strengthening their economic ties in the following years. However, in practice, this partnership has been very limited and fundamentally asymmetric. Despite...
In the tenth month of the Swords of Iron war, Israel stands at a crossroads in terms of the continued fighting in the Gaza Strip and the broader campaign against Iran and the “Axis of Resistance,” which are directly involved in the conflict. Every decision about the future will undoubtedly have significant economic consequences, especially considering that the projected budget deficit for 2024 is expected to significantly exceed the forecast underlying the current state budget. This is further compounded by the impact of the war on...
In the seven months since the Hamas attack on October 7, the onset of the war in the Gaza Strip, and increased security tension on several fronts, stable relations between Jewish and Arab citizens of Israel have been maintained, including in the mixed towns and cities. Despite fears voiced by some in the political and security establishment that the war could ignite widespread clashes between Jews and Arabs, it has not happened—even during the traditionally tense month of Ramadan and the Eid al-Fitr holiday. Most Arab citizens of...
In 2023 there was a sharp decline in the trade of goods between Israel and China, after years of continuous increases, in which China became a significant trade partner for Israel. While the decline could be attributed on the surface to the war in Gaza and the broader threat posed by the Houthis to international trade, these events primarily impacted trade in the final quarter of the year. However, the decline in trade between Israel and China was consistent throughout the year. This paper proposes three possible explanations for...
The war between Israel and Hamas is expected to have a significant negative impact on the Israeli economy. Estimates place the direct cost of the conflict (armament and mobilization of the reserves) and the indirect costs (population evacuation, reconstruction of the western Negev, interruptions to the manufacturing process, and reduced aggregate demand) at around NIS 200 billion. If these predictions are accurate, Israel would experience a 10 percent drop in GDP in the fourth quarter of 2023 and won’t experience any GDP per capita...
To understand the economic implications of the political crisis in Israel, we should closely monitor the currency exchange rate and the performance of the local stock market. These indicators reflect, in real-time, the sense of the general public, specifically stock investors, and serve as a “financial seismograph” for understanding current events. As the chart demonstrates, since the beginning of the year a significant gap has emerged between the performance of the Israeli stock market and that of its counterparts in the...
It was reported recently that the Minister of Finance intends to cut back allocations for the five-year development plans for Arab society that were already approved. These intentions contradict existing policy dating from 2015 designed to encourage socioeconomic enhancement of Arab society in Israel, based on a macroeconomic rationale and the necessary integration of the country’s large Arab minority. The explanations given are unsubstantiated and reflect an estranging approach of extreme nationalism. Realization of the Minister’s...
This paper surveys the trends in trade between Israel and China, in both goods and services, over the past decade (2013–2022). Especially noticeable is the significant and consistent rise in trade with Israel during those years, based mostly on the import of goods from China, which totaled $17.62 billion in 2022. The imports from China are diverse and include machinery for infrastructure and construction projects, consumer products ordered from Chinese websites, which to some degree has mitigated the rise in the cost of living in...
