Israel’s embrace of China a growing concern for US

Away from domestic political upheaval and ongoing hostilities on one border or another, Israel is also forging relations with countries that it has not had traditionally close ties with. There is no better example of this than the rapidly developing links between the tiny Jewish state with its population of less than 9 million and China, with its near-1.4 billion inhabitants. However, in this relationship there is a third country involved, namely the US, which is watching, not necessarily with jealousy but with grave concern mixed, at times, with anger. This is due to Israel’s all-too-frequent disregard for Washington’s unease as China makes inroads, figuratively and literally, deep into areas of America’s vital interests in the Middle East.

It was only in 1992 that Israel and China formalized relations and established diplomatic missions in Beijing and Tel Aviv. However, since the late 1970s, trade — mainly of military technology — had been conducted through middlemen, albeit on a small scale. Relations have gathered momentum since the beginning of the millennium, as it became clear to both sides that their interests correspond in many areas, although it has remained a challenge to avoid antagonizing Washington as far as pushing it to take retaliatory measures.

For China, Israel’s advanced technology-based economy, with its innovations in areas such as cybersecurity, bio-agriculture and green technology, is at the heart of its attraction. China is making huge efforts to move away from rapid economic growth based mainly on industrial production and has increasingly ventured into new technologies, where Israel is seen as a model to follow. Also, geopolitically, Israel’s location is another stepping stone for Beijing’s Belt and Road Initiative. For Israel, China not only has a vast, rapidly expanding economy presenting infinite opportunities, but it also has little interest in Middle East politics in general and the Israeli-Palestinian conflict in particular, beyond how this might affect stability and hence its economic interests.

In contrast, Israel’s two other major economic partners, the US and the EU, though not attempting to end the occupation of the West Bank and the blockade on Gaza too forcefully, are still occasionally critical of Israel’s policies toward the Palestinians and its obstructive stand on peace negotiations.

The White House has warned Israel that it must, and rather promptly, get its priorities straight.

Yossi Mekelberg

China also represents, along with India and Russia, the continuing diversification of Israel’s trade portfolio, as well as an insurance policy of sorts should other members of the international community, especially the US and EU, decide to take it to task over the peace process and the treatment of the Palestinians.

In the meantime, the trade figures between China and Israel are very impressive, not only regarding the rate of growth but also in absolute numbers. In 2018, those figures, including Hong Kong, which is one of the hubs for trade between the two countries, totaled $9 billion of exports from Israel ($4.8 billion to China and $4.2 billion to Hong Kong), while Israel’s imports amounted to $10.5 billion, the vast majority from China, and second only to its trade volume with the US. There is also constant growth in tourism in both directions with the introduction of more direct flights between the two countries year on year.

On the face of it, the picture is very rosy and is expected to grow even rosier. However, there is a snag: The fear that US concerns over these developments will lead it to pressure Israel to not only slow down on trade, especially as Washington is involved in a trade war with China, but also on security or geopolitical and geoeconomic grounds. The situation is even more worrying to the US when it comes to the transfer of sensitive military technologies and the physical presence of China in Israel, where it can spy on American military activity.

In the past, under considerable pressure, Israel caved in to Washington and cancelled a deal to install the Phalcon advanced airborne radar system on Chinese Air Force surveillance planes, and it also later backed out of an agreement to sell the loitering munitions system, also known as the “suicide drone.” However, in the last year and with a US administration that is more tuned in than ever to the Israeli government, the main sticking point between these two allies is the latter’s relations with China. It has reached the point where the White House has warned Israel that it must, and rather promptly, get its priorities straight and decide which relationship it values more. US Secretary of State Mike Pompeo earlier this year issued a stark warning to Israel, quite bluntly threatening that Washington might well loosen its defense ties with Tel Aviv over its growing cooperation with China, including scaling down “intelligence sharing and co-location of security facilities.”

If the transfer of military technologies is one aspect that irks the US about the China-Israel love affair, another is Beijing’s direct investment in Israel’s much-needed infrastructure improvements, as well as in its companies — a situation that is bound to have long-term consequences for the country and its foreign policy orientation.

Among other assets, Chinese companies searching for investment opportunities abroad have bought major Israeli concerns, including the country’s biggest dairy products company, Tnuva, and Adama, a major pesticide business. If building Tel Aviv’s light rail system is a relatively benign scheme, China’s upgrading and managing of the Port of Haifa, which for decades has been home to the US Navy’s Sixth Fleet operations, is a cause of grave concern for American security officials, who are worried that China will be able to spy on their navy’s activities in the Mediterranean Basin and the Middle East. This adds to their concerns over Chinese companies, including Huawei and its Israeli subsidiaries, which are deeply involved in Israel’s development of 5G telecommunications.

In this triangle, Israel is caught in the middle — though not as an innocent party — of a titanic clash between two major world powers. It cannot afford to irritate Washington to the point of provoking it to weaken their present strong strategic and economic relations, yet the temptation and rationale of ever-closer cooperation with China may also prove too great to resist.

• Yossi Mekelberg is professor of international relations at Regent’s University London, where he is head of the International Relations and Social Sciences Program. He is also an associate fellow of the MENA Program at Chatham House. Twitter: @YMekelberg