Analysis

Pompeo’s Concern in Israel Visit: Chinese Investment

Under talks of West Bank annexation and Iran, an issue of more concern to Washington was at play during the Secretary of State's lightning trip

Hagai Amit
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Israel's Prime Minister Benjamin Netanyahu, left, prepares to shake hands with China's President Xi Jinping at the Great Hall of the People in Beijing, May 9, 2013.
Israel's Prime Minister Benjamin Netanyahu, left, prepares to shake hands with China's President Xi Jinping at the Great Hall of the People in Beijing, May 9, 2013.Credit: ASSOCIATED PRESS
Hagai Amit

In the announcement that Prime Minister Benjamin Netanyahu, Kahol Lavan chairman Benny Gantz and incoming Foreign Minister Gabi Ashkenazi released following their meeting with U.S. Secretary of State Mike Pompeo, there was no mention of Israel’s relations with China. They discussed U.S.-Israeli ties, the joint front against Iran, what Gantz termed “President Trump’s peace plan” – and what Israel’s right wing considers the plan to annex territory in the West Bank.

But Pompeo didn’t drag himself to Israel a moment before our two prime ministers present the principles of their new government in order to address these issues. He came to address Israel’s economic ties with China, and left it up to the Israelis to connect the two issues.

As someone present at these kinds of conversations in the past said: “There’s no point in the conversation where the sides say, ‘We’ve finished talking about annexation, now let’s talk about China.’ If anything, the Americans say to the Israelis, ‘You said annexation? Let’s first talk about China.’”

The United States is still in the throes of the raging coronavirus pandemic, but U.S. President Donald Trump has been primarily focused on the economic crisis that resulted from the disease. Some 35 million Americans have lost their jobs over the past two months, and Trump is hoping to redirect their anger at China. On the horizon is the November presidential election. Initially, Trump blamed China for spreading the virus. He then started blaming it for the financial crisis.

On this note, Pompeo came to Israel to send a message about U.S. desires to limit the ability of Chinese companies to own Israeli companies involved in crucial services or that operate crucial infrastructure. This message is not only for Israel, but for all U.S. allies. But the other allies aren’t dependent on U.S. support in order to carry out plans to increase their own sovereign territory.

Pompeo’s message for Israel on Wednesday wasn’t composed in any official document, and neither were the agreements reached in the meeting. At most, each side prepared its own meeting summary.

The dozens of U.S. diplomats in Israel are the ones who will track Israeli policy regarding issues that bother the U.S. government. The Americans are primarily concerned with Chinese ownership and operation of certain businesses, but the most immediate implication from the discussion could come within a few months, regarding whether and how Chinese companies can take part in the tender to build the Sorek 2 water desalination plant at Kibbutz Palmahim. It could also have an impact on whether Chinese companies are involved in several privatizations that the incoming government is interested in carrying out, such as of the Israel Postal Service, the ports or Netgas.

In January, U.S. pressure drove Israel to form a committee to examine foreign investments within the country. The decisions of that committee, which operates within the Finance Ministry under the oversight of the chief economist, are classified. And yet, it maintains ongoing security coordination with the U.S. government.