https://thecradle.co/articles/china-labels-israel-as-high-risk-area-bans-all-new-investments-reportChina labels Israel as ‘high risk area,’ bans all new investments: ReportBeijing has canceled all new investments in Israel, a Chinese fund revealed in its response to a lawsuit filed against it by an Israeli settlement in the north.
Israelis from Kibbutz Hanita have filed a lawsuit against the Chinese fund Ballet Vision, which controls 80 percent of an intraocular lens plant located in the northern settlement, Israeli news site Ynet reported.
A lawsuit filed in the Tel Aviv District Court says the settlement is suing the Chinese fund for $11 million. It accuses Ballet Vision of refusing to carry out an option to purchase the settlement’s remaining shares in Hanita Lenses.
Ballet Vision responded to the lawsuit saying Israel has been classified a “high-risk area” since the start of the genocide in 2023 and has banned any new investments there.
“Since the outbreak of the fighting in Israel, the Chinese government has classified Israel as a high-risk zone (red category) and prohibited any new Chinese investment in the country. As long as this restriction remains in place, there is no practical operational ability to exercise the option,” the Chinese fund said in a letter.
The lawsuit says the settlement sold 74 percent of Hanita Lenses to Ballet Vision for $35 million in 2021, adding that $25 million out of that sum was paid to members of the settlement. An additional $10 million was invested in the company.
It also alleged that two 2022 deals with China diluted the company’s stakes and left Ballet Vision as the 80 percent owner of the Israeli lens manufacturer. Kibbutz Hanita has complained that its shares are “meaningless.”
Aside from the Chinese government's ban on investing in Israel, Ballet Vision says Hanita Lenses incurred significant operational losses.
Liu Yuxiao, a director of Ballet Vision and CEO of the lens manufacturing plant, said in December last year that Hanita Lenses sustained losses of around $15 million over a period of three years, as well as a $4 million debt. This resulted in severe financial issues.
Yuxiao said he became the CEO in March last year to try to prevent total collapse, and added that the company may now break even in 2026. He argued that talks about the share purchase are “premature” and could negatively impact the company’s recovery.
The lawsuit coincides with concerns over a potential US war against Iran. Tehran has vowed to strike Israel, as well as US bases across the region, if Washington attacks.
Several international airliners have canceled flights to Israel and issued notices to avoid Iranian airspace in recent weeks.