The ongoing pressure by the US for Israel to be warier of Chinese investments and involvement in sensitive areas such as technology and infrastructure may seem like a net negative for relations between Beijing and Jerusalem.
There are genuine security threats involved in allowing a foreign country to control so much of Israel’s infrastructure, and certainly the COVID-19 crisis highlighted the need for more self-sufficiency in an emergency. Specific issues have come up with Chinese companies around the world, such as weaknesses in communications projects that help Beijing gather intelligence, but Israel didn’t do much about the problem until the US pushed it.
Israel’s alliance with the US is one of its greatest strategic assets and a core part of its foreign policy. If Israel has to pick a side, it was clear that it would pick the US – even if the government was stringing the Americans along for a while – and ties with China would suffer.
The government’s decision on Tuesday to go with IDE Technologies, an Israeli company, to build Sorek 2, the world’s largest desalination plant, rather than the Israeli affiliate of Hutchison, a Chinese company, may seem like a clear-cut case where Israel is allowing tensions with its third-largest trading partner to increase, because of American pressure.
But there is another way to look at it, Carice Witte, Executive Director of SIGNAL – The Sino-Israel Global Network and Academic Leadership, posited on Wednesday. The latest developments show Israel is drawing a clearer framework for its ties with China.
Beijing may complain about unfairness, but Witte said the Chinese leadership is fully aware of the benefits Israel gets from its alliance with the US, from protection in UN Security Council votes to military aid, which China would not provide.
China’s leadership “understands that by giving the Americans this win, China-Israel relations can continue,” Witte said. “It gives them breathing room, and I hope that relations can continue to flourish for the time being.”
Witte argued that had Hutchison won the bid to build Sorek 2, the Trump administration may have put more pressure and sought more overt ways to put limitations on more Chinese companies.
“This was a good result. It shows the Americans we get it,” she added.
The Sorek 2 decision is only a first step, Witte argued, encouraging the government – as she has been doing for several years – to put together a comprehensive, strategic plan for its relations with China.
Witte said the response she generally got was that such a plan would upset China and the US too much, but she argued that Jerusalem “can take Chinese sensitivities into consideration” and formulate “a strategic plan that protects Israel on both sides.
“It is really incumbent upon Israel to share its view with Beijing that this is an opportunity,” she said.
A strategic plan is essential because so many other countries have become hopelessly entangled in too many Chinese investments.
Israel is less likely to fall prey to debt traps, a term referring to China extending excessive credit to another country and then using that debt for political leverage, but no country is without weaknesses. For example, the Israeli economy is so beholden to the tech sector that the government has tried to remove all the red tape for investments – to the point that Israel has left itself completely vulnerable.
Although the government established a new committee to review foreign investments, following US pressure, one of its many weaknesses is that private tech companies are not in its purview. This means that China can invest in – and therefore, access proprietary information about – sensitive areas like artificial intelligence and biotechnology without government intervention.
If Israel wants to continue benefitting from Chinese investments while reassuring the US – and itself – that sensitive areas are being safeguarded, it needs to make the rules of the game clear.
In Chinese culture, there is a concept called “guanxi,” which is not so different to what Israelis call “proteksiya,” but is a core value in China. In business ties, it means there is a dynamic of personal trust between two sides. It assigns value to long-term relationships, such that the sides feel obligated to one another.
Israel has a good long-term relationship with China, but it needs to keep up that trust, and setting clearer guidelines while showing the relationship is still important will help do that.
Having a strategic plan, as Witte suggested, wouldn’t just tell the Trump administration that Israel is taking its concerns seriously. It would be a way to show China that Jerusalem still wants to keep up ties, while protecting Israel’s strategic interests. In that way, US pressure on Israel when it comes to Chinese investments does not mean a total loss on the Eastern front; it could be an opportunity to start a new chapter in the ties between Beijing and Jerusalem.