Kibbutz members accuse China of banning Israeli investments since Gaza War

Members of Kibbutz Hanita, a rural community in northern Israel, are suing the Chinese-controlled Ballet Vision fund in the Tel Aviv District Court for $11 million over losses reportedly caused by the fund’s unwillingness to acquire the remaining stake in an intraocular lens plant.

While the Chinese fund already controls around 80% of the plant, kibbutz members argue that the Chinese government has imposed a ban on new investments in the Jewish state since the Gaza War with Hamas.

The Chinese fund responded to the lawsuit by arguing that the Chinese government has classified Israel as a “high-risk area” and effectively blocked new investments in the Jewish state. 

“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,” the Ballet Vision stated. “As long as this restriction remains in place, there is no practical operational ability to exercise the option."

The lawsuit noted that the kibbutz sold 74% of the Hanita lenses plant in 2021 to Ballet Vision for $35 million. Kibbutz members reportedly received $25 million of that sum, while the fund injected the remaining $10 million into the local company. The agreement further stipulated that minority shareholders could demand that the Chinese fund eventually purchase the remaining shares for $9.5 million. By December 2025, the value of that minority stake had increased to $11 million. At that point, the kibbutz called on the fund to honor the agreement and buy the remaining shares in the plant.

Kibbutz Hanita, located near the Lebanese border, was severely affected by persistent attacks on northern Israeli communities by the Iranian-backed Lebanese terrorist militia Hezbollah. The kibbutz had intended to use an infusion of new capital to rehabilitate the local community, with a particular focus on older members.

In the lawsuit, kibbutz members also complained that they had been excluded from the company’s management, which they say is led by representatives of the fund’s Chinese owner. As a result, they assessed that retaining their minority shares had become “meaningless,” having reportedly lost all influence over management decisions.

The dispute is further complicated by alleged losses amounting to $15 million, according to a letter penned by the Chinese fund’s director Liu Yuxiao in December 2025. The Ballet Vision director argued the fund’s dire financial situation does not permit further investments in the local kibbutz company. In addition, Yuxiao stressed that the Chinese government’s new investment policy concerning Israel has severely limited its capability to acquire the remaining shares in the company. 

However, it is currently unclear whether there is indeed an official Chinese investment ban on Israel. Trade between Israel and China has expanded dramatically in recent years.

Despite the Gaza war, it was reported last November that Chinese companies have increased their investments and role in Israeli national infrastructure projects. 

There are growing concerns in Israel and Western nations that China is spying on local industries and trying to steal technologies.