Israel informed the U.S. it will notify Washington about significant deals it strikes with China, and said it would reexamine these deals if opposition is raised.
The new step comes amid growing concerns by the Biden administration over China's increasing involvement in the Middle East.
National Security Adviser Jake Sullivan, who is in charge of formulating the U.S. policy toward China, discussed the matter with Israeli Foreign Minister Yair Lapid during his visit to Israel in December, as well as in an earlier meeting in Washington.
While the U.S. has yet to relay clear demands to Israel on the matter, officials in Jerusalem have recently begun discussions on policy toward China. The issue has been discussed in the security cabinet, the Defense Ministry and the Public Security Ministry, among others.
Israel is in the midst of a strategic dilemma as estimations are that the confrontation between the U.S. and China will soon reach a boiling point. Israel's dilemma is whether Jerusalem should stand by the U.S. or remain "under the radar" in order to not lose business with China, which is Israel's third-largest economic partner.
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Sources familiar with the matter said that Israel is taking a "business as usual" approach with China. Lapid recently met with the Chinese Science and Technology Minister Wang Zhigang as preparations for a mutual conference are underway.
Israel, meanwhile, also asked the U.S. about alternatives to Chinese companies in the infrastructure sector, a move that yielded no results so far. A similar request was made to the U.K., and Israel hopes to advance mutual initiatives in the infrastructure sector with India and the United Arab Emirates as well.
Sources in the Biden administration have recently relayed messages to senior Israeli officials, expressing their concern over Chinese investments in Israeli infrastructure projects, as well as China's attempt to deepen its involvement in Israel's economy and hi-tech industry.
Last year, the U.S. administration offered to conduct a comprehensive security review of the Haifa port, due to Washington’s concern over a Chinese company’s involvement in the expansion of the port. The review would have been conducted by a team from the U.S. Coast Guard, but Israel declined the offer.
Washington has signaled it expects Israel to stand by the U.S., which suspects China and its motives.
A senior Israeli official told Haaretz in October that the Biden administration did not give Israel clear instructions in regard to its policy on China. The official added that Israel will review the American policy once it is crystallized.
In November, the presidents of Israel and China called for increased cooperation between the two countries in a historic phone call – the first ever between an Israeli head of state and a Chinese president.
President Xi Jinping and President Isaac Herzog had a friendly conversation and noted the historic nature of the call, according to Herzog's office. They agreed to advance cooperation in the fields of tourism, economy and culture.