In the past, Israel’s attempts to sell advanced weapons systems to Beijing have caused tensions with Washington. More recently, as Arthur Herman warned last year in Mosaic, further problems seemed likely to arise from the increasing technological and trade cooperation between the Jewish state and the world’s largest Communist country. But, in response to more robust U.S. efforts to push back against China economically, Jerusalem has begun to reverse course. Jonathan Schanzer and Owen Helman explain:
The Chinese telecommunications giant Huawei, under fire for sharing data with the Chinese government, acquired two small Israeli start-ups, HexaTier Technologies and Toga Networks, in 2016. Their technology bolstered Huawei’s capability to monitor network traffic, a prime U.S. concern. . . . Israel has since taken steps to halt Huawei from building 5G network infrastructure in the country, and Huawei phones are just 3 percent of the Israeli market. Israel has [also] vowed to follow the lead of the Five Eyes [intelligence-sharing group]—the United States, the UK, Canada, Australia, and New Zealand—when it comes to the Chinese tech giant. Israel’s restrictions are actually tougher than those in the UK and Canada, and more in line with Australia’s and New Zealand’s.
Technology isn’t China’s only avenue of foreign direct investment [in Israel], however. China’s state-run companies have won tenders for massive infrastructure deals in recent years. These companies are involved in port construction at Haifa and Ashdod, construction and maintenance of the Tel Aviv light-rail system, and more.
The [most serious] concern for Israel might actually be China’s construction of its light-rail system, projected to provide daily transportation for 500,000 people. If Israel doesn’t take precautions, the Chinese government could gain unrestricted access to closed-circuit surveillance feeds, wi-fi networks, radio signals, and other communications systems. China’s long history of cyber espionage and intellectual property theft cannot be ignored.
Until recently, Israel lacked the bureaucracy to mitigate the risks associated with Chinese investment [and had] no analog to the Committee on Foreign Investment in the United States. The Israelis are now setting up their own investment-oversight committee to weigh the benefits of foreign investment while mitigating possible national-security risks. . . . When all is said and done, what Israel does now will serve as a roadmap for other U.S. allies navigating the rising tensions between Beijing and Washington.
Read more on National Interest: https://nationalinterest.org/feature/israel-americas-unlikely-ally-trade-war-china-76256