Analysis |

Netanyahu Had Little Choice but to Have China Lose Big Israel Bid

Israel thought it could navigate between the powers, but the coronavirus crisis has sharpened tensions, and Trump's reelection campaign is centered on blaming China

Amos Harel
Amos Harel
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Benjamin Netanyahu meets with Mike Pompeo in Lisbon, Portugal, December 4, 2019.
Benjamin Netanyahu meets with Mike Pompeo in Lisbon, Portugal, December 4, 2019.Credit: Kobi Gideon / GPO
Amos Harel
Amos Harel

The Finance and Energy Ministries announced Tuesday that the Israeli company IDE Technologies had won the contract to build and operate the Soreq 2 desalination plant, beating out the Hong Kong-based Hutchison Water. The huge facility, whose construction will cost an estimated $2 billion, will be erected close to the existing facility, which is near both an air base and a nuclear research facility.

As reported last year in Haaretz, the bidding was accompanied by a sharp dispute between defense officials and the Energy Ministry, as well as heavy pressure from U.S. President Donald Trump's administration. The objections stemmed from the fact that Hutchison is a Chinese-controlled company, with Nir Ben-Moshe, director of the Defense Ministry Security Authority, expressing extra concern because of the new plant’s proximity to security installations.

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There was also increasing U.S. pressure, which apparently came to a head during Secretary of State Mike Pompeo’s visit two weeks ago. Amid mutual recriminations between Washington and Beijing regarding the spread of the coronavirus and the increasing rivalry between the two countries, the U.S. is asking its friends to avoid signing huge infrastructure contracts with Chinese firms. What exactly Pompeo said to Prime Minister Benjamin Netanyahu about the matter is not known. One can also assume that the tenders committee had enough good reasons to prefer the Israeli contender over the Chinese competitor.

Still, only a few days before his corruption trial was to begin, Netanyahu chose to devote several hours to discussing Washington’s request regarding the desalination plant. Asked about this last week, Israeli officials said the final policy would be determined by the prime minister. If forced to choose between the United States and China, it appears clear to Netanyahu whom Israel needs more.

The tender for Soreq 2 may have been settled, but future episodes in the regional U.S.-China rivalry are expected to require Israel to make more tough decisions. Over the past few years, it seemed that Israel was managing to maneuver between its close strategic relationship with the United States and the flourishing economic ties that were developing with China. But in 2018 the White House started to complain about the scope of the contracts Chinese firms were winning, particularly for the project to upgrade Haifa’s port. Yet despite the repeated protests from Washington, Israel preferred to believe that the storm would blow over and it wouldn’t be forced to choose between two relationships that Jerusalem saw as vital.

At the end of last year, just before the coronavirus overturned the global agenda, the security cabinet approved a new mechanism for reviewing large foreign investments in the Israeli economy, a move that was completely aimed at pacifying the U.S. But the steps that were approved were less than what the Trump administration had wanted, and since then the pandemic has intensified the hostilities between Washington and Beijing.

It now looks as if Trump will make blaming China – for the pandemic, for the destruction of the American economy and for the unprecedented international crisis – a central component of his campaign for reelection. His administration has already marked its next targets as far as Israel is concerned, the most significant being a ban on allowing China to build 5G cellular infrastructure, a demand that has also been made of other close U.S. allies. It looks as if in this arena, too, Jerusalem will have to act in accordance with Washington’s expectations.

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