Israel Must Partner with US in the Great Power Competition with China

By IDF MG (ret.) Yaacov Ayish, JINSA Senior Vice President for Israeli Affairs

Israel and the United States are nearing an agreement to exclude Chinese technology from the former’s 5G networks – another indication that Jerusalem is heeding Washington’s demand for a tougher stance against Beijing. As US-Sino ties continue to fray, Israel must decisively support Washington’s efforts to face down Beijing. This would serve not only America’s interests, but Israel’s as well.

Amid China’s race to overcome American regional and global dominance, there have been growing concerns in Washington over Beijing’s access to Israeli technologies. The involvement of Chinese companies in major infrastructure projects in Israel – such as the Tel Aviv Light Rail, the Carmel Tunnels, and the Ashdod and Haifa ports – have also drawn American scrutiny for potentially handing China surveillance opportunities. For instance, the decision to tap a Chinese firm to operate the Haifa Port has raised security concerns for the US Navy, whose Sixth Fleet occasionally docks nearby.

Like others, Israeli companies dealing with China risk having their intellectual property stolen, and their technology used to bolster China’s military capabilities. The Pentagon noted in 2019 that China supplemented its military modernization efforts with “the acquisition of foreign technologies and know-how,” including through “imports, foreign direct investment, industrial and cyberespionage, and establishment of foreign R&D centers.”

Other risks abound. A Chinese company involved in the Tel Aviv Light Rail project, for instance, is a subsidiary of another that has business ties with an Iranian firm controlled by the Revolutionary Guards. Such companies might be pressured by Beijing to divulge information to Tehran, a regional partner of China’s.

This relationship should concern Israel. Iran describes the Jewish state as a “cancerous tumor” that will “be uprooted and destroyed,” and it supports like-minded terrorist groups such as Hezbollah, Hamas and Palestinian Islamic Jihad.

Iran is now reportedly pursuing a wide-ranging partnership with China that would invest some $400 billion in the Islamic Republic in exchange for discounted oil supplies. Projects would include airports, railways and port facilities – the latter seemingly complementing China’s control of ports in countries including Pakistan, Greece and Sri Lanka, which have raised fears over Chinese naval ambitions. Military cooperation would also expand with joint exercises, weapons development and intelligence sharing.

The partnership could provide a lifeline to Iran amid renewed American sanctions. For China, it would offer energy security while advancing its Belt and Road Initiative and strengthening its position in the Middle East.

It also crystallizes what has been evident for some time: China is not a friend to Israel.

Beijing has already signaled that it will resume arms sales to Iran when a United Nations embargo on the country lifts in October, and it opposed US efforts to secure an extension. Israel must ensure its sensitive technologies and infrastructure remain inaccessible to a country so willing to empower its greatest enemy.

However, the potential impact of such a move should not be overstated. While Chinese investment in Israel’s technology sector has grown in recent years, it remains relatively low. Between 2016 and May 2020, the sector attracted $33.15b. in total investments, according to data shared by Zeev Holtzman, chairman of the Tel Aviv-based IVC Research Center. Just $1.43b. of those investments – about 4% – were Chinese.

Normalization accords between Israel and Arab countries represent a possible alternative funding stream. The Economy Ministry has already predicted that United Arab Emirates’ investments in Israel could total up to $350 million annually, with the cyber, medical, communications and financial technology sectors the big winners.

Alternatives for Chinese involvement in sensitive infrastructure projects, likewise, also exist. This May, Israel picked a local company over a Chinese competitor to build a major desalinization plant, reportedly following US pressure. With the ongoing economic tumult caused by the coronavirus pandemic, there is even greater cause to channel work to domestic firms.

It will be important for Israel, with American backing, to strategically reduce its ties with China. Jerusalem and Washington should capitalize on the strengths of Israel’s hi-tech ecosystem – including its educated workforce, strong research institutions and varied investment sources – to expand and deepen collaboration on joint priorities. These include artificial intelligence, cybersecurity and the Internet of things, among others – technologies on which hundreds of Israeli start-ups are already focused. A US-Israel national security innovation fund could incentivize partnerships that develop and harness such technologies in the coming years.

The World Economic Forum described Israel in 2019 as “an innovation hub” where “entrepreneurial culture is the strongest” and “innovative companies grow the fastest.” The Jewish state is a valuable partner to the US in the great power competition with China.

For Israel, continued American global dominance is critical to future security. The key for both allies lies, as ever, in increased cooperation.

Yaacov Ayish is a former defense attaché to the United States and Canada, and former head of the IDF General Staff Operations Branch. He is senior vice president for Israeli affairs at the Jewish Institute for National Security of America (JINSA).