Israel’s Agenda with China

by July 2023
China’s President Xi Jinping and Israel’s Prime Minister Benajmin Netanyahu in Beijing, China, May 2013. Photo credit: REUTERS / Kim Kyung-Hoon

On June 27, Prime Minister Binyamin Netanyahu told a visiting American congressional group that he plans to visit Beijing later this year, adding that the US administration had been informed of this intention. No date has been set nor has the Chinese government confirmed an invitation to Netanyahu. 

>>  Insight from Israel: Read more from Eran Lerman

Why is Netanyahu announcing a visit to Beijing – beyond the obvious personal need to extricate himself from the grip of corrosive domestic politics and once again claim a place on the global stage? What can he hope to achieve? 

Israel has an agenda, though a fairly modest one, with China.

  • Clarify Israel’s threat perception if Iran continues to advance towards a military nuclear capability. As recounted below, Israel has found China receptive to such messages in the past. 
  • Reaffirm the mutual interest in regional stability, including support for the economic survival of key players such as Egypt.
  • Discuss technology cooperation, from medicine to agriculture – but to a much lesser degree than in his past visits to Beijing in 2013 and 2017, when Israel still hoped to lure large Chinese investments in infrastructure and high-tech, enthusiasm for which has since died down at both ends.
  • Promote trade – though again, it is not as important as it seemed to be five to ten years ago. Israeli exports to China in 2022 were at $4.7 billion (and imports nearly three times as much at $13.1 billion), as compared with $18.7 billion in exports to the US and nearly $50 billion in exports to Europe.

Given the present state of rivalry in US-Chinese relations, some pundits in Israel interpreted Netanyahu’s initiative as a calculated response to Biden’s critical attitude towards his government, indeed, as a deliberate signal that Israel may have other options. But that is a misreading of Israel’s actual relationship, present and future, with China.  

At the military level, it has been nearly twenty years since anyone in the Israeli defense establishment even toyed with the idea of partnership with China – given the well-remembered US sharp reaction to previous attempts to do so, when for instance in 2005 Israel offered to upgrade the “Harpy” attack drones it had sold to China a decade earlier. 

This is clearly no longer going to be a visit marked by high hopes for extensive Chinese investment in Israeli high-tech companies or in national infrastructure. The relatively starry-eyed previous visits, in 2013 and 2017, were still colored by such expectations: large delegations of senior businesspeople from Israel went with Netanyahu, seeking to engage with their Chinese counterparts. The Chinese sang the praises of Israel as a start-up nation, and a joint forum on innovation was established at the ministerial level in 2014. But much has happened since to dampen such spirits on both sides.  

It gradually dawned on the Israeli government that a Chinese-built and controlled train corridor from Eilat to the Mediterranean, or a Chinese-operated port facility in Haifa, raises serious American concerns – and may be tinged, as Israel’s State Comptroller report suggested in August 2020, by the willingness of Chinese companies to promote strategic interests (such as access to sensitive information) while offering infrastructure bids at non-economic prices.

Thus, while the Haifa container terminal was built by a Chinese company close to the main commercial and the military ports of Haifa, no Chinese bidder was in the final round in 2022, competing for the contract to buy and operate the main port. Moreover, in a choice that was read as a strategic signal, it went to an Indian business group – Adani – and its Israeli partner. 

As to internet infrastructure projects, no Israeli 5G contracts went to the Chinese (unlike in other countries in the Middle East and Europe). Israel largely turned its back on the Chinese. The last undersea cable entry point in Israel was laid by HMN Tech (formerly Huawei Marine Network) in 2001. It and other Chinese tech providers have undertaken dozens of such projects elsewhere in the Middle East. 

US concerns about American-Israeli technologies reaching China, about potential Chinese control of Israel’s vital infrastructure, and about Israeli innovative companies being acquired by Chinese-controlled enterprises have all been made known, loud and clear, to Israel in bipartisan fashion, not only in visits by Biden and Trump administration officials but also in the speech of Republican Speaker of the House of Representatives Kevin McCarthy, who referred to these concerns before the Knesset on May 1, 2023, urging Israel to strengthen its oversight of foreign investments. 

Nor does Israel have an interest in active Chinese mediation with the Palestinian Authority, which surfaced in the media following the visit in Beijing of President Mahmoud Abbas. China may be welcome into the circle of presumably supportive players called the “Quartet”of the US, the EU, Russia and the UN, turning it into a “quintet.” But on the full range of issues concerning the (dim) prospect of permanent status agreement, the Chinese position is far too favorable to Palestinian demands to be of interest to Israel. 

What could be Netanyahu’s active agenda, then? Above all, on the matters most important to Israel, namely the Iranian nuclear challenge, past experiences indicate that at times China may be more open to suasion at the higher levels of diplomacy than meets the eye (as long as the call for it to act in a more cooperative spirit is backed by a heavy hint of what may happen otherwise). 

Iran’s President Ebrahim Raisi meets China’s President Xi Jinping in Beijing, China, February 2023. Photo credit: VIA REUTERS

Back in 2010, I took part in an extraordinary diplomatic mission. Led by Minister of Strategic Affairs (and former military chief of staff) Moshe Yaalon and Chairman of the Bank of Israel Stanley Fischer, we came to Beijing to speak about sanctions against Iran. This was closely coordinated at the time with the Obama administration and was in support of Secretary of State Hillary Clinton efforts to secure a resolution to that effect at the UN Security Council. 

The message to the Chinese leadership (specifically to Dai Bingguo, at the time the master of Chinese foreign policy) was simple and stark. The choice is not between doing business with Iran, as they comfortably had been doing, and unpleasant option of imposing sanctions. The choice would be between joining the Americans’ sanctions drive and the real possibility of military action, by Israel alone if necessary as Yaalon implied, if no other means would be there to stop Iran. Should this happen, a war may ensue which would trigger a global crisis – threatening Chinese growth, as Fischer eloquently explained. 

All this came with a good dose of evidence about Iran’s activities and intentions. Our hopes were modest. Perhaps we could stir the PRC to abstain, rather than cast a veto. But surprisingly, both China and Russia actually joined all other permanent members in voting for what became UNSCR 1929, establishing the required sanctions regime under Chapter 7 of the UN Charter (it was passed 13 to 2, with Brazil and Turkey voting against). 

Xi Jingping’s China in 2023 – an overt ally of Putin’s Russia and of Iran – is clearly going to prove a more challenging interlocutor than it was more than a decade earlier. It has been able to position itself as an arbiter between Saudi Arabia and Iran, utilizing and strengthening the perception of American weakness. But Xi may still choose to listen to a coherent Israeli warning. Netanyahu has been saying much the same thing to other permanent members of the UN: do not let things come to the point in which military action will be inevitable, regardless of the costs. This is reason enough for Netanyahu to try and reason with Beijing. 

Yet there are other reasons to engage. Water management, innovative agriculture, green solutions, and above all medical innovations for a “graying” population, are all within Israel’s ability to be of help, without running into the US investment curbs targeted at national security concerns. This is all the more important because Israel sells arms to many of China’s neighbors, including Japan, the Philippines, Vietnam and India. It remains important not to be perceived in Beijing as an enemy, which could motivate it to take increasingly hostile positions and lend support to those who threaten Israel’s security. 

There will be trade and investment items on the agenda, but if Netanyahu indeed does go to Beijing, he will not be as beholden to would-be investors as he seemed to be during earlier terms of office. Strategic concerns, not trade and investment, will determine the agenda.  

Finally, one such strategic concern has to do with China’s role in the Eastern Mediterranean, a key terminus of Xi Jinping’s “Belt and Road” vision. Greece and the Adriatic, as well as Egypt and the Suez Canal, are important entry points to Europe. The object lesson is Sri Lanka where Chinese-built projects like the Hambantota International Port, now leased to China for 99 years, the Matalla Airport and the Port City Colombo commercial zone – all turned out to be “white elephants” which helped ruin the national economy. Yet not all Chinese investments in Israel’s region need to be viewed in zero-sum terms. Insofar as the Chinese act in ways which help avert economic collapse in Egypt, they should be encouraged, not shunned: this is a point Israel can make in Beijing and Washington alike.

In short, what will not be on Israel’s agenda with China is any attempt to play with the notion of a Chinese alternative to America. China is an important interlocutor, not a partner or patron. At best, Israel would seek to reassure Beijing that it does not look upon it as an adversary.  

>>  Insight from Israel: Read more from Eran Lerman

Eran Lerman
Col. (ret.) Dr. Eran Lerman is a former senior intelligence officer. He served as Israel’s deputy national security adviser (2009–2015), and prior to that as director, AJC Israel and ME office (2001–2009). He is currently the vice president of the Jerusalem Institute for Strategy and Security and a lecturer at Shalem College. @EranLerman
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