Prime Minister Naftali Bennett and his staff returned from the US this week with an understanding of how the Biden administration expects Israel to act when it comes to investments from China, a senior government source said this week, and that the prime minister plans to take action. The source would not specify what that action will be.
Among the possibilities Bennett has considered is moving the committee overseeing major foreign investments from the Finance Ministry to the National Security Council, which is directly under his authority.
Meanwhile, the government has delayed a tender to build part of the Tel Aviv Light Rail because a Chinese company submitted a bid, making the situation diplomatically sensitive.
The current and previous administrations in Washington have expressed concern over the extent of Chinese investments in major infrastructure in Israel, as well as in hi-tech, including artificial intelligence. Though Israel established a committee to review foreign investments, under pressure from the Trump administration, the panel is voluntary and has a very narrow scope. The Trump administration called for Israel to establish a more robust oversight process for such investments.
One of the American investments that raised concerns in recent years was the Haifa Bay Port, which opened on Wednesday and is operated by the Shanghai International Port Group.
While the Biden administration has been rallying international allies against Chinese hacking, human rights violations and other malign behavior, a senior diplomatic source in Bennett’s delegation to Washington also said – hours after the prime minister’s meeting with US President Joe Biden on Friday – that the Americans did not make specific demands of Israel vis-à-vis China.
In addition, Foreign Minister Yair Lapid said on Wednesday that “on China, there is no concrete demand coming from the Americans.”
In a briefing to the foreign press at the Foreign Ministry, Lapid said that Israel understands that “the kind of tension there is between the US and the new administration versus China is going to dictate a lot of the international maneuvering in the coming future, but no one has asked us to change anything.”
Israel and China have strong bilateral relations, mostly in the business sphere, Lapid said, with China taking a special interest in Israeli technological developments. At the same time, he added, Israel conducts a constant dialogue with China to try to encourage it to stop voting against Israel in international organizations.
“We have never tried to hide the fact that our greatest ally is one and only one, the US,” Lapid said. “We share the same values.... [Former US secretary of state] Henry Kissinger wrote a lot about the fact that policies are made in the balance between realism and idealism. We’re playing a long-term game with this one. It’s important to maintain relations with China, but we are listening to the Americans when they talk about it.”
A spokesperson for the US Embassy in Israel said: "The United States and Israel continue to discuss our concerns over the risks to our shared national security interests, including those from foreign investment. We will not comment on the specifics of private diplomatic exchanges.”
The 5.5 billion shekel ($1.7b.) Bay Port at Haifa, which will be operated by Shanghai International Port Group (SIPG), will bring much needed competition to a sector plagued by delays and boost the country’s standing as a regional trade hub.
The port will enable larger classes of cargo ships carrying 18,000 containers or more to dock in Israel.
The country is selling its state-owned ports and building new private docks in an effort to bring down costs and cut above-average wait times for vessels to unload. About 99% of all goods move in and out of Israel over sea, and an upgrade is needed to maintain economic growth.
Warming ties with neighboring Arab countries are also creating new trade opportunities for Israel, and Haifa is well placed to become a regional hub.
“I’m sure we can leverage this opportunity not just for local prosperity, but for realizing opportunities and making a real contribution to our neighbors in the Middle East,” Transportation Minister Merav Michaeli said in a statement, after the port was inaugurated in a low-key ceremony on Wednesday.
Another new port on the Mediterranean coast is due to open in Ashdod by the end of the year, to be operated Swiss-based Terminal Investment Limited.
Another new port on the Mediterranean coast is due to open in Ashdod by the end of the year, to be operated Swiss-based Terminal Investment Limited.