Israel has enough sense and self interest to avoid efforts to drag it into US-China trade war, analysts say

25-Jan-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

Uncertainty over China’s relationship with Israel is growing as the United States puts pressure on its allies to harden their stance on Beijing while trade and geopolitical tensions between the world’s biggest economies get worse.

As China and Israel prepare to mark the 27th anniversary on Thursday of diplomatic ties, analysts from both countries worry that relations, caught in the US-China crossfire, may face more difficult tests.

Like most other countries, Israel wants to maintain good relations with both the US and China and is concerned about an escalating rivalry, Gal Luft, co-director of the Institute for the Analysis of Global Security, a Washington-based think tank, said.

“Sadly, the new atmosphere in US-China relations is putting many countries Israel included in an extremely uncomfortable situation in which they are forced to pick sides,” he said.

Luft, a former lieutenant colonel in the Israeli Defence Force, said Israel could become a “sandwich country” like Canada, caught in the middle as Washington continued efforts to build an international coalition against Chinese telecoms giant Huawei.

Since its arrest of Sabrina Meng Wanzhou, Huawei’s chief financial officer, at Washington’s request, Canada has found itself in a diplomatic crisis when Beijing detained two Canadians and is threatening more retaliation.

In recent weeks, senior US officials have increased pressure on Israel to reconsider China’s investments in infrastructure and hi-tech sectors there.

US National Security Adviser John Bolton urged Israeli prime minister Benjamin Netanyahu two weeks ago to tread carefully where Chinese telecommunications companies, such as Huawei and ZTE, were concerned because of national security concerns.

Bloomberg reported that US deputy secretary of energy Dan Brouillette issued a warning last week in Tel Aviv that Chinese investment in Israel’s national infrastructure, such as the port of Haifa, could compromise intelligence sharing with the US.

Chinese Foreign Ministry spokeswoman Hua Chunying hit out at Washington this week, describing its warnings as “ridiculous”.

“The US has been abusing the idea of ‘national security,’ slandering and striking down the normal commercial activities of Chinese enterprises,” she said on Monday.

The Sino-Israeli relationship is very different from Beijing’s ties with oil-rich Middle Eastern countries such as Saudi Arabia, Qatar, Iran and Iraq, one analyst said.

Apart from its hi-tech industries, Israel has a significant military and political role in the Middle East. Beijing is seeking to increase its presence in the region as the US plans to withdraw troops from Syria and Afghanistan, Huang Jing, dean of Institute of International and Regional Studies at Beijing Language and Culture University, said.

“Israel may be small in size but is fairly influential in regional geopolitics and its long-standing special ties with Washington in particular make it uniquely important for Beijing”, which sought to steady relations with the US, he said.

Assaf Orion, a retired Israeli brigadier general and a visiting fellow at the Washington Institute for Near East Policy, said China for Israel had great potential as a market, a source of investment, a trade and tourism partner, and an infrastructure powerhouse.

“Israel’s China policy mainly seeks to balance the benefits of their bilateral economic ties on the one hand and its own strategic national security concerns on the other, with the all-but-formal strategic alliance with the US being a paramount national interest for Israel,” he said.

Ties between China and Israel have improved in recent years, especially where trade, investment, education and tourism were concerned.

During a visit to Beijing in 2017, Netanyahu said that China accounted for one-third of the investment in Israel’s hi-tech industries.

Citing a report by the Israel Venture Capital Research Centre, Reuters said Israeli tech start-ups raised $325 million from Chinese investors in the first three quarters of 2018, up 37 per cent from the same period a year earlier.

During a visit to Jerusalem by China’s vice President Wang Qishan in October, Netanyahu said that the two countries would complete a free trade agreement this year.

According to a report by Israel’s Institute for National Security Studies in 2017, “China is also involved in building infrastructure in Israel, such as digging the Carmel road tunnels in Haifa, laying a light railway in Tel Aviv, and expanding the Ashdod and Haifa seaports.”

Haifa is Israel’s largest port city and a berth for the US Sixth Fleet. In 2013, the Netanyahu government approved China’s Shanghai International Port Group’s plans to operate the container terminal there for 25 years beginning in 2021.

US has stepped up pressure on Israel to scrap the deal and one of the Sixth Fleet’s warships refused to dock at Haifa in October, citing security concerns that doing so could compromise US and Israeli intelligence assets.

But Luft was critical of Washington’s stance on the Haifa port project as the Chinese company was the only bidder in an open tender.

“The US government is punishing the people of Israel twice” by demanding its ally cancel the deal, Luft said. “First, by denying them competition in the port sector, which would lower their cost of living, and second the government will have to pay a large fine to China if the deal is cancelled. This fine will come at the expense of important public services.”

Despite a boost in diplomatic and trade ties and China’s interest in Israel’s military and security technologies, arms sales and military cooperation between the two countries were limited because of US pressure.

The US moved to block the export of the Phalcon airborne early warning system in 2000 and the Harpy killer drones in 2005 to China.

Orion said that while China’s diplomats often speak about win-win relationships, Israel’s challenge was to seek a win-win-win situation within a triangular relation between the two great powers and a start-up nation state.

“When much of the media discourse is pitching Israel into an exclusive ‘either/or’ choice between the two powers, Israel’s strategic concept should seek ‘precision choice’, promoting its relations with China prudently while minimising risk to itself and avoiding any harm to the US and the strategic relations with it,” he said.

But Luft also voiced concerns that as tension grew between the US and China, Washington tended to expand the definition of “national security” to include broader technology fields like microchips, telecommunication and artificial intelligence.

“This is where I foresee the next set of challenges. Israel will have to determine how far it can stretch the definition of national security and strike the right balance between its commercial needs and its relations with Washington. Israel is a sovereign country. Being a friend and ally of the US does not mean that Israel must be subservient to every whim of Washington,” Luft said.

However, Washington’s pressure campaign seemed to have worked as Israeli officials sought to reassure their American ally over the past week.

Under US pressure, Israel is mulling plans that include legislation to vet foreign investments for the first time, according to Israel’s Haaretz newspaper.

Israeli analysts also expressed dismay over China’s close relations with Iran, Israel’s arch rival in the region, and Beijing’s long-standing pro-Arab and pro-Palestinian policies, saying China often voted against motions that Israel favoured at the United Nations.

“China’s relations with the Arab World are less of a concern in the current regional landscape. However, China’s relations with Iran, which is both obsessed about Israel and committed to its destruction, are more of a worry,” said Orion.

China could do more to dissuade Iran from its aggression against China’s partners in the region: Israel, Saudi Arabia and the United Arab Emirates, he said.

“Keeping the relations good requires constant nurturing, especially at a time the US is trying pull Israel away from China,” Luft added.

Huang also said Beijing must be more careful in dealing with Iran. “The ultimate goal for Beijing should be to avoid advancing Iranian ties at the expense of Sino-Israeli relations,” he said.

He said that despite structural differences between the two countries, Israel had rarely adopted an anti-Chinese stance on issues of importance to Beijing.

“While it remains to be seen how Israel deals with mounting pressure from the US over Huawei and other Chinese telecoms companies and a host of geopolitical issues, I think Israel is shrewd enough to avoid taking sides between the US and China,” Huang said.


Category: China

Print This Post

Comments are closed.