China and Israel – a waning relationship

It was back in the 1990s that the Chinese began to realize that Israel was fast becoming a global technology hub.  Previous frosty relations began to thaw, and China started to engage with Israel’s growing hi-tech, partly to enhance Chinese power in the Middle East, partly to help speed their own innovative developments.  It was not long before the thriving economic and technological Sino-Israeli relationship became a cause of concern to the US administration. The US regards China as its prime competitor for influence and profit in the Middle East, and warning bells began ringing in Washington.

The US National Security Strategy prioritizes “maintaining an enduring competitive edge” over China. The head of Britain’s secret service, citing China’s cyber warfare and espionage activities in the UK, recently called it the agency’s top intelligence priority.  He was none too complimentary, either, about Chinese President Xi Jinping’s Belt and Road Initiative (BRI), which has seen China investing billions into development projects throughout the Middle East and Africa in an obvious attempt to enhance Chinese power and influence.  “Debt and data traps” was his succinct description.

Benjamin Netanyahu, Israel’s prime minister in the twelve years till June 2021, did not quite see it that way.  Over that period, with his enthusiastic support, Israeli governments conducted a clear policy of promoting economic relations with China in the fields of hi-tech innovation, investment, infrastructure projects and trade. Netanyahu perceived China’s growing economy as an important opportunity for Israel.  Chinese companies, mainly through the BRI, have been involved in upgrading Israeli ports and in building infrastructure such as the Tel Aviv light rail.

Even so, Israel has consistently maintained control over network management and electricity provision, restricted Chinese companies from controlling key infrastructures and ensured that Israel remains in charge of management, maintenance, and development of its ports. The light rail in the Tel Aviv area runs about 150 meters from the headquarters of the Israeli military. Aware of the obvious security risk, in January 2019 then-Shin Bet chief Nadav Argaman called for legislation to oversee Chinese involvement in the country’s infrastructure projects.

In May 2020 Washington formally asked its allies to sever ties with China in areas with security risks.  As a result, in August 2020 the UK government announced that products manufactured by the China-based company Huawei, one the world’s largest providers of telecommunications equipment, would be removed entirely from the UK’s 5G networks by the end of 2027.

Slowly, perhaps too slowly, the democracies have come to understand the danger to national security of allowing China-based companies to construct and operate infrastructure projects that are key to the functioning of the state itself. As a result, Sino-Israeli relations have cooled.

One expert commentator, noting that bilateral trade grew from $50 million in 1992 to some $15 billion or more in 2021, added that “a closer look at the data shows that in 2018 both Israeli exports to China and Chinese investment in Israel peaked. The former thereafter declined and then plateaued.”

Israel has also taken steps to align its political position on China with Washington. In late June 2021 Israel joined with the US in the UN Human Rights Council’s condemnation of China’s inhumane treatment and forced incarceration of its Uyghur minority. On the thorny issue of Taiwan, recognized as an independent state by much of the world but long claimed by China as one of its provinces, Israel could not remain neutral if China decided to invade.  The US would most likely condemn China and impose sanctions, and Israel would most likely concur.  One reason why China’s President Xi has hesitated thus far from taking irrevocable action against Taiwan is probably the damage it would cause to China’s carefully constructed power and influence BRI structure across the Middle East.

On December 1, 2022 the Washington-based Middle East Institute published a carefully researched survey of the current state of Sino-Israeli relations.  Among a variety of other issues, it noted that since 2019 favorable views of China among Israelis have declined.  Until then  Chinese state media and Chinese diplomats had succeeded in penetrating Israel’s media sector and shaping Israeli public opinion. Among the devices employed were direct messaging to the Israeli public in local Hebrew-language newspapers, and the use of the Hebrew department of China Radio International targeted at Israeli audiences.

Israeli sentiment has shifted for a number of reasons, not least the public’s awareness of repression in China, Beijing’s mishandling of the COVID-19 pandemic, unfavorable reporting by the Chinese media of the 2021 conflict with Hamas in Gaza, and repeated voting against Israel in the UN. Most impactful, perhaps, has been Beijing’s policy in respect of Iran.  By continuing to import Iranian oil, China has provided Iran with an economic lifeline, leading to a possible strategic partnership with a regime dedicated to destroying Israel

By late 2022 Israelis had come to recognize the potential risk to its national security from China’s cyber technology, and the danger of becoming economically dependent.  Bilateral trade and investment slowed. Meanwhile, Israel was facing increasing pressure from the US to limit Chinese involvement in the Israeli economy.

In his recently published memoir Netanyahu describes the tightrope he walked in Israeli-Chinese relations.  While seeking to foster bilateral China-Israel investment, he was at the same time candid with the Chinese about his firm commitment to the US to restrict military and intelligence technologies.

Now Netanyahu is back in charge of Israel’s government.  As the Institute for National Security Studies recently remarked: “The man who over the past decade enthusiastically championed the development of Israel’s relations with China must chart Israel’s future path between China and the United States, and between the economy and national security.”

By Neville Teller

Neville Teller’s latest book is “"Trump and the Holy Land: 2016-2020". He has written about the Middle East for more than 30 years, has published five books on the subject, and blogs at Born in London and a graduate of Oxford University, he is also a long-time dramatist, writer and abridger for BBC radio and for the UK audiobook industry. He was made an MBE in the Queen's Birthday Honours, 2006 "for services to broadcasting and to drama."