A new American study recommends that the U.S. government help Israel set up an oversight mechanism for Chinese investments and technology in the country.
The study, crafted by the RAND Corporation, proposes increased American involvement in this issue to prevent harm to U.S. security interests. The authors warn that Chinese involvement in Israeli infrastructure projects could potentially create security threats for Israel, and perhaps for the United States as well.
As first reported in Haaretz last year, Israel’s growing commercial and technological ties with China worry the Trump administration. In conversations with Israeli ministers and other senior officials in recent months, concerns have been voiced about the possibility of China misusing Israeli technology. Officials have also mentioned that Chinese companies have won a significant proportion of the contracts for major Israeli infrastructure projects, like Haifa’s new port.
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The RAND report, which sources familiar with the issue say was recently presented to the Pentagon, says that “China’s primary objectives in Israel are acquiring advanced technology and utilizing Israel’s location for trade connectivity.” Israel’s location, it says, could be useful in China’s Belt and Road Initiative, which aims to create geographic contiguity that would increase Chain’s economic ties and global influence.
Israel, for its part, seeks to expand its commercial and diplomatic ties with China’s rapidly growing economy in order to diversify its markets beyond Europe and the United States.
But these growing ties could result in a divergence of interests between Israel and the United States, the report warns. “China’s engagement with the Israeli tech sector could upset Washington, especially in light of growing trade tensions between the United States and China,” it says.
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According to RAND, the fact that China is building and operating key Israeli infrastructure facilities raises “political and security concerns.
“The acquisition of Israeli companies and the knowledge generated through academic cooperation could enable China to gain crucial technologies, with insufficient returns for Israel,” the executive summary posted on its website continues.
“Chinese installation of and access to cameras, radio, fiber-optics, and cellular networks raise cybersecurity, data privacy, and espionage risks. Chinese involvement in commercial ports adjacent to Israeli naval bases raises security concerns for Israel and possibly the United States.”
The researchers say that Israel needs to better understand the “opportunities and challenges” posed by close relations with China and expand its knowledge of China. They recommend that Israel study other countries’ experience to tackle these challenges.
Israel could benefit “from instituting a formal government interagency coordination mechanism to manage policy toward China,” they say. It should also increase its knowledge about China, which is currently lacking, by enlisting the help of experts who speak Chinese and understand “Chinese society, politics, foreign policy, economics, military development, and strategic goals.”
Israel’s analysis of its relationship with China should focus not just on Chinese investments, but also on “its modes of operation, that could distinguish it from other countries with which Israel is engaging,” they add.
The report advises the U.S. government to work more closely with Israel to shape the Israeli-Chinese relationship and help Israel understand China’s policies and goals. China should be regularly discussed as part of the American-Israeli dialogue, and the two countries should agree to share information and jointly monitor the expansion of Chinese investments and other economic activity, both in Israel and the wider Middle East, it says.
“This is especially important as growing voices in Israel call for developing a process to scrutinize Chinese economic practices more closely,” it adds.
During his visit to Israel in January, the U.S. national security adviser, John Bolton, discussed Washington’s concerns about Israel’s economic ties with China in his meetings with Israeli officials.
Also, Israel’s security cabinet recently discussed creating a formal process to approve and monitor large-scale foreign investments. But that proposal, which was intended in part to allay Washington’s concerns about China, has yet to be finalized, and it is likely to be delayed at least until after next month’s election.