The U.S. urged Israel to block Chinese moves to invest in the country’s 5G cellular networks on Tuesday in a conversation between U.S. Ambassador David Friedman, Communications Minister Yoaz Hendel and Zvi Hauser, chairman of the Knesset Foreign Affairs and Defense Committee.
The government faces two major decisions involving Chinese investment in the local telecommunications market. First there is the purchase of equipment to set up and operate 5G networks. Then there is the question of whether to allow China’s Hutchison firm to regain control of Israel’s Partner cellular company some 10 years after it sold its controlling share. Hutchison is waiting for approval from Israel’s regulator. Previously, industry players had predicted that Hutchison would sell off the shares in Partner it had received from previous controlling shareholder Haim Saban.
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The ambassador issued the warning on the same day that a government panel announced that an Israeli group had won the bidding process for a major desalination plant over Hutchison. The announcement came ten days after a visit to Israel by U.S. Secretary Mike Pompeo, who warned that Chinese investments in infrastructure could pose a security risk.
The government invited tenders for 5G frequencies last year, after which, a senior Pentagon official told Haaretz at the time, Washington warned Israel of security risks involved in introducing Chinese 5G technology.
Under President Donald Trump, the United States has put pressure on Israel, along with many of its allies, to limit Chinese investment in the country as part of the two countries’ trade war, with tensions soaring in recent months amid the coronavirus crisis.
Israel's security cabinet decided in October to establish a mechanism to monitor Chinese investments following the U.S. pressure.