Amid trade war tensions, is Israel getting too close to China for America’s comfort?
- Yigal Chazan says the US is worried about several Chinese infrastructure projects in Israel, including a commercial shipping facility near a naval base. While Israel has stopped selling arms to China, it still exports sensitive technologies
Retired US admiral Gary Roughead, a former chief of naval operations, has spoken of US reservations about the Haifa port deal. He pointed out that the Chinese port operators “will be able to monitor closely US ship movements, be aware of maintenance activity and could have access to equipment moving to and from repair sites”, Newsweek reported.
The magazine quoted him as saying that such factors would not prevent brief port calls but “would preclude homeporting and other protracted projects and initiatives”.
Commander Kyle Raines, a spokesman for the US Sixth Fleet, told The Jerusalem Post that though there were no changes yet to its operations in Israel, he could not speculate on “what might or might not occur in 2021”, when the Chinese take control of the commercial port in Haifa for 25 years.
In an apparent effort to allay US concerns, the Israeli government is reportedly reviewing the 2015 deal with the Shanghai International Port Group, which is partly owned by the Chinese state.
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The Chinese project seeks to transform the Haifa bay terminal into the largest harbour in Israel. It is one of several Chinese projects in Israel, including a port in Ashdod, a light railway in Tel Aviv and two water desalinisation plants.
Amid trade tensions between the US and China, Washington is also uneasy about Beijing’s growing involvement in Israel’s hi-tech sector.
Ilan Berman of the American Foreign Policy Council has suggested that Chinese investment could compromise the integrity of American-Israeli projects in the eyes of the Americans.
Over the years, China has emerged as Israel’s second-largest trading partner, behind the US. Israel’s sales of goods and services to China rose more than 60 per cent in the first eight months of 2018, to US$3.5 billion.
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There are misgivings, though, within Israel’s security establishment. Some believe that China’s close links with Iran, an implacable enemy of the Jewish state, could undermine Israel’s security and defence ties with the US.
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In 2000, the US pressured Israel into cancelling the sale of the Phalcon airborne early-warning radar system to China. Five years later, Israel cancelled plans to upgrade Harpy military drones sold to China in the 1990s. Both episodes dealt blows to Sino-Israeli relations.
Concern about the lack of regulatory oversight of deals with China has prompted speculation about how carefully the Israeli government scrutinised the Haifa port deal before approving it – given that Haifa is home to the country’s fleet of submarines, which are believed to be capable of launching nuclear missiles.
But all this may have given impetus to closer scrutiny of foreign investments in Israel. Last month, Haaretz reported that a new bill will give a government committee the powers to change or disallow deals with foreign investors. Supporters of the bill had been proceeding with caution so as not to upset China.
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Israel faces a tricky balancing act. It cannot afford to alienate either Washington or Beijing, but their increasingly competing interests in Israel are bound to make the task of keeping both of them on its side challenging, to say the least.
Yigal Chazan is the head of content at Alaco, a London-based business intelligence consultancy