China emerges as potential strain on US-Israel relationship

Increasingly close ties between China and Israel risk straining the special relationship Israel has with the U.S., especially as Washington ramps up its feud with Beijing over the spread of the novel coronavirus.

The historic alliance narrowly avoided a diplomatic fallout this week with Israel relenting to U.S. concerns and delaying a Chinese infrastructure project in the country, coinciding with a whirlwind visit by Secretary of State Mike PompeoMichael (Mike) Richard PompeoFired State Department watchdog says Pompeo aide attempted to 'bully' him over investigations Ousted watchdog says he told top State aides about Pompeo probe 7 GOP senators slam State Dept for 'slow and inefficient policy' on passports MORE to Jerusalem.

While the U.S. has long expressed concern to Israel over its ties with China, Israeli officials have signaled they are not stepping back from relations with Beijing entirely.

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Pompeo used his latest visit to highlight the risk of doing business with the Communist Party.

“We do not want the Chinese Communist Party to have access to Israeli infrastructure, Israeli communication systems, all of the things that put Israeli citizens at risk,” Pompeo said in an interview Thursday with an Israeli news channel, “and in turn put the capacity for America to work alongside Israel on important projects at risk as well.”

Chinese officials shot back, accusing Pompeo of raising the alarm on security risks “without producing any concrete evidence.” They called his comments "absurd" and expressed hope that Israel will defeat the “political virus.”

China's relations with Israel were thrust further into the spotlight on Sunday when the Chinese ambassador to Israel was found dead at his official residence in the city of Herzliya, north of Tel Aviv, from a suspected heart attack, according to Israeli officials. No foul play is suspected, though China is sending a team to investigate the death and collect the body.

Still, Pompeo's short visit came with a diplomatic win for the U.S.

Israeli Prime Minister Benjamin NetanyahuBenjamin (Bibi) NetanyahuMORE reportedly delayed signing a $1.5 billion contract for a desalination plant with the Hong Kong-based Hutchison Water International in response to U.S. concerns.

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Ram Ben-Barak, a member of Israel’s Yesh Atid political party and former deputy director of the Mossad, Israel’s foreign intelligence service, said it was a wise decision on Netanyahu’s part.

“We have to make decisions today to make sure we are not stuck between the Americans and the Chinese tomorrow — why put ourselves in that silly position?” he told the Financial Times.

“We don’t have anything against China, or Hutchison as a company — but if our best ally, the U.S., has concerns about this project, we should recheck it, and give them all the information they need to be calm and relaxed here,” he added.

The quick decision to delay the infrastructure deal with the Chinese firm is an example of how U.S. demands are shifting in response to its concerns over Beijing, especially as Washington seeks to have China held accountable for the global spread of the novel coronavirus.

“The secretary doesn’t have a problem with people having relationships with China or having trade with China,” a senior State Department official said in a briefing with reporters after Pompeo’s trip to Israel. “But I think COVID sort of highlights the dangers of dealing with states that are not transparent.”

Pompeo, in his remarks alongside Netanyahu on Wednesday, alluded to China as untrustworthy amid the coronavirus pandemic.

“You’re a great partner,” the secretary told Netanyahu. “You share information, unlike some other countries that try and obfuscate and hide that information, and we’ll talk about that country, too, some.”

Israel had earlier put a prohibition on any deals with China related to the military in response to U.S. demands, and it has blocked the Chinese telecommunications company Huawei from operating its 5G network in the country.

But Israel views China as a strategic economic partner investing in its high-tech industry and infrastructure projects in the country.

And the Chinese have in turn increased their investment, putting up to $1 billion between 2013 and 2018 in the Israeli health and biomedical sectors, The Jerusalem Post reported, and approximately $325 million in Israeli tech in 2018, according to Reuters.

The Chinese firm SIPG is set to run a port it's building in the Israeli coastal city of Haifa for 25 years, a project that also drew pushback from the U.S.

“For years Israel was told that civilian applications and business were fine,” said Jonathan Schanzer, senior vice president for research at the Foundation for Defense of Democracies. The think tank has troubleshot discussions and possible solutions for providing alternatives to U.S allies to shift away from their reliance on China in areas the U.S. views as a threat to national security.

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“This is a very recent shift that Israel is now adjusting to and they are feeling a bit whipsawed over this,” he said.

China’s investments in infrastructure are also an extension of their Belt and Road Initiative, the ambitious international trade and infrastructure project that critics warn is China’s effort to expand its global influence and prominence.

“As the alarm bells have gone off in Washington about China, now it’s started to create this tension [between Israel and the U.S.],” said Ilan Goldenberg, a senior fellow and director of the Middle East Security Program at the Center for a New American Security.

“Ultimately the Israelis are going to defer to the U.S. But they are going to be annoyed about it because they feel like we are dictating to them and taking away legitimate economic opportunities,” he said.

Both Goldenberg and Schanzer say the U.S. can do more to open a dialogue with Israelis over where the lines exist for appropriate business relations with China and which deals are a threat to U.S. security.

For Goldenberg, this kind of dialogue would be similar to how the U.S. handles its weapons deals with Gulf Arab states.

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“We like to sell arms to the Gulf states because it’s good for our defense industry and our broader interests but it freaks the Israelis out,” Goldenberg said. “But we figured out a way to strike the balance,” he said, adding that a similar model should be applied to how Israel wants to engage with the Chinese.

“The U.S. is generally more concerned about China than Israel is — that applies to Democrats and Republicans,” Goldenberg said. “We need to figure out how to have that dialogue but I think it’s entirely plausible that we do.”

But those types of dialogue are likely harder to have as relations between the U.S. and China near rock bottom, with the Trump administration infuriating Beijing over its pressure campaign amid the pandemic.

But the coronavirus has sparked discussions inside Israel over what future relations with China will look like, Schanzer noted. Like the rest of the world, Israel has sought to contain the virus and grappled with what responsibility Beijing holds for the virus, the first cases of which were identified in the Chinese city of Wuhan.  

“The COVID-19 crisis has prompted more of a debate inside Israel about China ... about the reliability of China as a partner,” he said. “At a minimum China sought to prioritize commerce over public health and that is a cause for concern. Israel did notice this was a problem.”