Israel May Be Turning Away from Chinese Investment

July 19 2022

Last week, a joint venture between an Indian and an Israeli company won a bid for the rights to manage Haifa’s seaport. The nearby container port, by contrast, will still be managed by a China-based firm. Yet the new deal may suggest a move away from large-scale Chinese economic entanglement in the Jewish state, which has been a matter of concern for the U.S. for some time—not without reason. Sarah Zheng and Coco Liu report on other evidence that something has changed:

Before 2018, China had been positioning itself as an important international partner for the Israeli tech industry, which sought capital and access to one of the world’s biggest markets. Chinese investors were far from its most vital sources of capital—they invested $424 million in Israeli startups in 2018, about 5 precent of the total investment into the sector—but their connections to Israel were deepening.

In retrospect, that may have been the high-water mark. Last year, Chinese capital accounted for only 1 precent of investment in Israeli startups, data from the IVC Research Center show. This could be a strategic disadvantage for Beijing, which has been grappling with growing hostility from the West.

Companies in Israel that once welcomed Chinese financiers, particularly in sensitive deep-tech sectors, are now hesitant to do business with them because of the potential political consequences in other markets. Under pressure from its U.S. and European backers, one supplier of electric-vehicle components this year abandoned plans to take Chinese capital in exchange for access to the world’s biggest EV market, according to a person with knowledge of the matter.

In part, Israeli startups may be getting pickier because they find it easier to attract investors than they have in the past, says Ehud Levy, a general partner at Canaan Partners Israel and also a partner at China’s Lenovo Capital. And even if it hasn’t yet succeeded in getting Israel to adopt its entire policy agenda, the U.S. has convinced many Israeli entrepreneurs of the need to choose sides.

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Read more at Bloomberg

More about: China, Israel-China relations, Israel-India relations, Israeli technology

 

UN Peacekeepers in Lebanon Risk Their Lives, but Still May Do More Harm Than Good

Jan. 27 2023

Last month an Irish member of the UN Interim Force in Lebanon (UNIFIL) was killed by Hizballah guerrillas who opened fire on his vehicle. To David Schenker, it is likely the peacekeeper was “assassinated” to send “a clear message of Hizballah’s growing hostility toward UNIFIL.” The peacekeeping force has had a presence in south Lebanon since 1978, serving first to maintain calm between Israel and the PLO, and later between Israel and Hizballah. But, Schenker explains, it seems to be accomplishing little in that regard:

In its biannual reports to the Security Council, UNIFIL openly concedes its failure to interdict weapons destined for Hizballah. While the contingent acknowledges allegations of “arms transfers to non-state actors” in Lebanon, i.e., Hizballah, UNIFIL says it’s “not in a position to substantiate” them. Given how ubiquitous UN peacekeepers are in the Hizballah heartland, this perennial failure to observe—let alone appropriate—even a single weapons delivery is a fair measure of the utter failure of UNIFIL’s mission. Regardless, Washington continues to pour hundreds of millions of dollars into this failed enterprise, and its local partner, the Lebanese Armed Forces.

Since 2006, UNIFIL patrols have periodically been subjected to Hizballah roadside bombs in what quickly proved to be a successful effort to discourage the organization proactively from executing its charge. In recent years, though, UN peacekeepers have increasingly been targeted by the terror organization that runs Lebanon, and which tightly controls the region that UNIFIL was set up to secure. The latest UN reports tell a harrowing story of a spike in the pattern of harassment and assaults on the force. . . .

Four decades on, UNIFIL’s mission has clearly become untenable. Not only is the organization ineffective, its deployment serves as a key driver of the economy in south Lebanon, employing and sustaining Hizballah’s supporters and constituents. At $500 million a year—$125 million of which is paid by Washington—the deployment is also expensive. Already, the force is in harm’s way, and during the inevitable next war between Israel and Hizballah, this 10,000-strong contingent will provide the militia with an impressive human shield.

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Read more at Tablet

More about: Hizballah, Lebanon, Peacekeepers, U.S. Foreign policy