o doubt, the coronavirus pandemic has deepened the schisms in the U.S.-China relationship, which has been slipping down the path of a new Cold War. Believing that China’s global soft power expansion by investing in infrastructure and companies abroad presents a serious national security threat, the Trump administration has pressured its allies and partners to censor and/or regulate Chinese investment in their countries. Unless steeped in a comprehensive understanding of China’s aspirational global role and systematic actions, coupled with an alternative strategy to Chinese investment, the Trump administration’s policy is all sticks and no carrots guaranteeing at best-mixed results.
Among Washington’s allies that have faced increasing pressure to censor Chinese investment in their country is Israel. The recent contractual win of Israeli company IDE Technologies to build the Sorek2 water desalination plant over the Hong Kong-based Hutchison Water controlled by Chinese billionaire Li Ka-shing, as originally thought, is undoubtedly a reflection of Jerusalem’s deference to Washington’s concerns and pressure. In fact, Washington has for some time raised its concerns with Israel over Chinese investment in and/or control, among others, of Haifa Port and over dual-use technologies. American officials are worried that China’s Shanghai International Port Group running the port could jeopardize the security of America’s 6th Fleet that docks at Israeli ports. They also worry about Chinese firms acquiring Artificial Intelligence capabilities through civilian investments that could enhance a new generation of Chinese weapons.
The Israel-China relationship has steadily improved since the two countries established diplomatic relations in 1992. Significantly, the level of economic cooperation shot up when Chinese leader Xi Jinping assumed the presidency in 2013. Bilateral trade went from a meager $50 million in 1992 to $5 billion in 2010, then soared to $15.3 billion in 2018. Israel provided China a stable, flourishing, and sophisticated nation with a highly advanced technological sector. Initially, China sought Israel’s expertise in solar energy, robotics, construction, and agricultural and water management and desalination technologies. The two countries signed two financial cooperation agreements in 1995 and 2004 to promote bilateral trade. By 2010, Israel had approximately 1,000 firms operating in China.