Israel's Cabinet Discusses Supervision of Chinese Investments Amid U.S. Pressure

Meeting held a day after Treasury secretary visits Israel; National Security Council wants supervisors to only have advisory powers

נתניהו ומנוצ'ין בלשכת רה"מ, אתמול. חברי הקבינט הוזמנו לישיבה רק בשבוע שעבר
Mati Stern / Israel Embassy

Israel’s diplomacy-security cabinet discussed the establishment of a body to supervise Chinese investments in the country – under U.S. pressure.

The meeting was held a day after U.S. Treasury Secretary Steve Mnuchin visited Israel, during which he met with Prime Minister Benjamin Netanyahu. The discussion had not been planned, and cabinet members were notified of it only last week.

According to the proposal, which the National Security Council headed by Meir Ben-Shabbat formulated, the supervisory body is expected to receive strictly advisory powers. TheMarker reported that the body would review investments by foreign entities in Israel companies, in which companies are tied to national infrastructure projects and those that are of vital importance for the country’s citizens. The move is liable to hurt the Israeli high-tech industry, which in recent years has enjoyed a steady flow of Chinese investments.

John Rood, the U.S. Undersecretary of Defense for Policy, told Haaretz this past summer that the American administration had warned Israel of the security risks involved in introducing Chinese 5G cellular network technology. Rood said the Chinese leadership has chosen to challenge the post-World War II international order in a way that threatens U.S. national security. During his visit, Rood met with senior Israeli officials, including Ben-Shabbat.

Rood described relations between the United States and China as “competitive.”

“The issue there is not so much China’s ambition to grow. We don’t fear that,” said Rood.

“What we do get concerned by is that while the United States and Israel share the same set of values and outlook of the world, the kind of respect for human freedom, free commerce, free movement of ideas, respect for others’ sovereignty, intellectual property, innovation – what we see in China’s case is China’s leaders choosing to challenge the international order that benefits all of that.”