Biden Admin Urges Israel to Protect Technological Assets From Chinese Takeover

Israel previously told the U.S. that it would inform it in advance of significant deals it promotes with China, and in case of opposition, they would be re-examined

Jonathan Lis
Jonathan Lis
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A Chinese owned port terminal in Haifa last year.
A Chinese owned port terminal in Haifa last year.Credit: Rami Shllush
Jonathan Lis
Jonathan Lis

Israel needs to do more to protect its “advanced critical technologies” from a Chinese takeover while also keeping an eye on its relations with China – which could harm American national security – U.S. Deputy Assistant Secretary for Multilateral Affairs and for Global China Issues Dr. Jung H. Pak said on Thursday.

Pak’s remarks come against the backdrop of messages sent from the administration at the beginning of the year to senior Israeli officials regarding their concerns about Chinese investments in Israeli infrastructure and China’s attempts to increase its grip on the Israeli economy and in the high-tech sector.

Speaking at the Sino-Israel Global Network and Academic Leadership’s (SIGNAL) annual conference this week Pak said: “The U.S. is not interested in disconnecting China’s economy from the American economy or the global economy. We are working to ensure that China will follow the rules of the game that apply to everyone,” Pak said. Referring to Israel, she said that the “[U.S.] does not wish for Israel and others in the region to decouple from China… We want to promote trade in ways that do not threaten our security and human rights values.”

Pak remarked on shared principles of how geopolitical challenges affect trade relations. Pak noted that China does not respect widely held global principles when it comes to foreign investing. “The principles are not accepted everywhere. On the contrary, in the past they have been used for unfair profits and illiberal purposes by China.”

Pak noted how China has collaborated with thriving Israeli hi-tech companies through technology transfer programs and talent recruitment projects. Chinese-owned government companies are investing hundreds of millions of dollars in diverse ventures and critical technologies with dual-use capabilities, including artificial intelligence, cyber and robotics.

“These uses come from legitimate sources such as joint research developed with foreign funds or with foreign universities, but also through theft and financial fraud.” Pak said the U.S. wants all partners in the international community to “raise awareness of these risks, engage in risk assessment and develop risk management measures.”

Former assistant secretary of state for near eastern affairs during the Trump administration David Schenker was also a participant at the SIGNAL conference. Schenker said that “the United Arab Emirates was promised F-35 aircraft as part of the Abraham Accords, but when the American government looked into the matter, it turned out that the aircraft operate on a 5G network… Every NATO member that has an F-35 does not use Huawei’s 5G networks. The United Arab Emirates made a different choice.”

Schenker also told SIGNAL founder and CEO Carice Witte that “Israel was late in understanding the challenge facing China – as well as the United States,” and emphasized that the U.S.-Israel relationship will be able to navigate any hardships, but “a problem with China will greatly cloud the relationship.”

Witte also said that “at the heart of the rivalry between the U.S. and China is technology. This rivalry has a very big impact on us. China is interested in Israel and is looking for technology here, and at the same time, it is deploying technology all over the Middle East… As China becomes a weighty regional player, it is increasingly more important that Israel formulate a clear policy in relation to it.”

Schenker and Witte at a conference on Thursday

Israel told the U.S. this January that it would inform it in advance of significant deals it promotes with China, and in case of opposition, they would be re-examined. This, against the background of the American concern about China’s growing involvement in the region.

Last year it was published in Haaretz that the American government proposed to Israel to conduct a comprehensive security inspection of the port of Haifa, in view of the concerns in Washington about the involvement of a Chinese company in the expansion of the port. The inspection was supposed to be carried out by a team from the United States Coast Guard, but Israel rejected the offer.

The Chinese involvement in the project has for several years provoked severe criticism in Washington, and especially in the Pentagon. The American security establishment is concerned about the possibility that the Chinese activity will be an opening for technological surveillance of the port, while collecting information on the Israeli Navy’s movements and joint activity with American ships. Against this background, Israel was about continued cooperation. In various meetings, the Israelis were even told that the ships of the Sixth Fleet would stop docking in the port of Haifa due to the Chinese involvement.

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