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Why is China so interested in Israel and the Jews?… The U.S.-China-Israel Technology Triangle… Israel-China Ties: The ‘Sticking Point’ with the US?

‘The Chinese? Yeah, briefly. I once tried explaining to them that their pursuit of nuclear fission and their excessive research into the field quantum mechanics was an absolute waste of their time and resources… Did they listen? Did they fuck!… I was like… “Fuck off then, I’m going to talk to the Russians!” 😀 (as usual)

“So far, Israeli leadership has been able to walk a fine line between the two countries, but it’s playing a dangerous game that may backfire terribly.”
These concerns have pushed Israel right into the middle of the US’s great power rivalry with China. Israel has attempted to walk the tightrope, delicately balancing its economic ties with China and security ties with its biggest ally, the US….

Why is China so interested in Israel and the Jews?

By Ron Csillag, Staff Reporter – August 2, 2019 190 0

Prof. Xu Xin

Why are China and its citizens so interested in Israel and Judaism? Books on the subjects sell briskly in the country, and courses in Jewish history, culture and literature are popular. Entrepreneurs have reportedly even relied on a Chinese edition of the Talmud to make business decisions.

Prof. Xu Xin, likely China’s leading scholar on Judaism and Israel, agrees that keenness in this area is high.

“Many students take courses on Judaism at college,” Xu told The CJN in an email interview. “Books on Judaism sell well. The fact that more and more Chinese are interested in Talmud is an example. Chinese companies, as well as officials, show their interest, too.”

One of the “major” reasons for the interest, Xu said, is that Israel is considered a nation of start-ups “and many people believe the innovation of Israelis has everything to do with Judaism.”

Xu might be the leading exemplar of that strong interest. He is the director of the Glazer Institute for Jewish and Israel Studies at Nanjing University, president of the Chinese National Institute of Jewish Studies and the author of several books on the Jews of China.

The academic “has made it his life’s pursuit to present a more nuanced view of the Jewish race and religion to his countrymen: one based on scholarship rather than rumour,” noted a 2014 profile in the online magazine Tablet.

To that end, Xu launched the Institute of Jewish Studies in 1992, the first of its kind in Chinese higher education.

“Seeing Israel Through China’s Eyes” will be the topic of a talk Xu is slated to give at Beth Emeth Bais Yehuda Synagogue in Toronto on Aug. 15 at 7 p.m.

The talk comes at a time when Sino-Israel relations have been growing. In 2013, Prime Minister Benjamin Netanyahu traveled to China, the first official visit by an Israeli prime minister in six years. The trip was thought to signal growing Chinese interest in Israel’s high-tech industry, as China attempts to shift from a manufacturing to an innovation and knowledge-based economy.

China only established diplomatic relations with Israel in 1992. The reasons for the late date, Xu suggested, are “political”: both governments missed an opportunity to establish formal ties in the early 1950s.

“Please remember,” he noted, “that China and Saudi Arabia and many other Arab countries did not have formal relations either before 1990.”

While China has supported “the Palestine cause,” the government believes “Israel has the right to be a country of its own. In other words, China never supported the idea to destroy Israel or deny the right of the existence of the State of Israel,” he said. The two-state solution “is her stance.”

Officially, the China’s communist government recognizes just five religions: Buddhism, Taoism, Islam, Protestantism and Catholicism. The country’s Jewish population, which is estimated at between 5,000 and 8,000, is too small to present a concern to the leadership, Xu said.

Besides, the government believes Judaism is limited to ex-patriates. “Since China does not believe there are Chinese Jews, her policy never covers Judaism,” Xu said. Thus, China allows scholars to study Judaism and ex-pats to practice it.

One may not associate China with classic anti-Semitic tropes, but Xu confirmed that Jews are widely believed to control banks and the media in the West, and are unusually successful in business. In China, however, that’s meant as a compliment – a sign of accomplishment.

“This impression (of Jews) is positive in general,” Xu explained. “Had Jews achieved nothing or little, no Chinese will be interested in them.”

Xu’s talk will be presented by Kulanu Canada, the Canadian Antisemitism Education Foundation and the Canadian Institute for Jewish Research.

The U.S.-China-Israel Technology Triangle

Since the 1980s, Israel has had robust technological cooperation and trade with the U.S. while often, in deference to U.S. security concerns, limiting the sale of some technologies to China. This delicate strategy is becoming harder to maintain as China becomes more interested in Israeli tech and tensions between Washington and Beijing grow.

Guest Blogger for Net Politics July 30, 2019

Chinese President Xi Jinping and Israeli Prime Minister Benjamin Netanyahu shake hands ahead of their talks at Diaoyutai State Guesthouse in Beijing, China March 21, 2017. Etienne Oliveau/Pool via REUTERS

Danit Gal is a consultant and researcher focusing on technology ethics, governance, safety, security, and strategy.

Since the 1980s, Israel has carefully walked the U.S.-China technology tensions tightrope, trying to balance its commercial and security interests with the two great powers. The growing dual-use nature of technology threatens to overthrow Israel’s careful efforts to expand trade with Beijing, while avoiding the sales of security technologies that would increase Chinese military capabilities and anger Washington. With mounting political pressure from its American allies and promising Chinese trade prospects, Israel is caught between its two largest and technology-hungry trade partners.

U.S.-Dominated Security Technology Trade

Security concerns, both domestic and from Washington, have shaped Israel’s sales to China from the beginning. Israel began selling military technology such as missiles, radars, and navigation systems to China in the 1980s, even before Beijing recognized Israel, and technology trade quietly intensified in the 1990s. At the same time, there were a string of allegations that Israel transferred sensitive military technology to China. Concerned about China’s potential use of advanced airborne early-warning (AEW) radar systems, the United States dissuaded Israel from lucrative arms deals in 2000 and 2005, souring Chinese-Israeli security trade relations. No further sales of military technology between China and Israel have been reported since.

Israel’s willingness to walk away from arms deals with the Chinese at the United States’ request is unsurprising given the countries’ strong military and political relationship. The United States and Israel, a recipient of over $3 billion in U.S. military aid, often co-develop weapons and coordinate their sales to ensure that sensitive technology doesn’t fall into enemy hands. Israeli officials have been especially vocal about the risks posed by military technology trade with China, noting that Chinese weapons sold to Tehran have in the past been transferred to Hamas and Hezbollah.

Furthermore, Israeli officials are concerned about the numerous Chinese cyberattacks on Israeli companies and government networks. Israel firms are an attractive espionage target as their cutting-edge technologies are used by many major powers. If Israeli systems are hacked, both Israel and its trade partners could be compromised. There are similar concerns about Chinese investment in Israel. American fears of espionage led to the Israeli government’s reassessment of China’s successful bid to operate the country’s biggest port in Haifa, which regularly hosts visits from U.S. Navy ships for bilateral exercises and port calls.

Israel’s separation of its commercial and security technology trade with China, however, is no easy task. The case of Huawei is illustrative. While the Israeli government pushed back against the United States’ position on completely banning Huawei due to commercial interests, it also avoids using Huawei’s equipment in its critical infrastructure due to security concerns. This type of balance will become increasingly difficult.

Even though the sales of military technologies have stalled, commercial technology trade with China has grown at a dizzying pace, boosting Israel’s technology exports. As of 2018, the United States still significantly leads China in terms of high-tech capital investment, with the United States accounting for 35 percent and China for 3 percent of investments. In addition, U.S. companies have established 344 R&D centers in the country, Chinese companies only 9. Chinese capital investment and R&D centers may be underrepresented, however, because Chinese capital is often invested via Israeli funds. Israeli entrepreneurs may also under report, fearful that receiving Chinese investments could negatively affect business in the United States.

Whereas growing U.S.-China technology tensions cause significant Israeli political and security concern, they also provide new opportunities for economic growth. Israel’s flourishing semiconductor industry is illustrative. Intel has found a workaround to U.S.-China trade tariffs by increasing direct sales from its Israeli plant, thus boosting semiconductor trade between Israel and China by 80 percent in 2018. In parallel, China is increasing investments in Israeli semiconductor companies and driving up demand for locally-designed chips. China’s demand for alternative commercial technology trade partners in light of tightening American trade restrictions is an unexpected economic boon to Israel, but the importance of chips for technological advancement and military use means Israel’s position in this technology triangle is bound to attract Washington’s attention.

Never Let a Good Crisis Go to Waste

The negative implications of growing U.S.-China technology tensions are reverberating around the world with disrupted supply chains and protectionist trade policies. If tensions escalate further, Israel could risk finding its American and Chinese trade partners less forgiving of its delicate balance. But every crisis is an opportunity. A technologically robust Israel can gain from being pinched in a technology triangle as long as it maintains well-thought-out controls on dual-use technologies. Enhanced coordination between Israel’s commercial and security technology sectors on dual-use technology transfers can help sustain this delicate balance. Even with these measures, a hard balancing act is bound to become harder as technology trade between the three countries increases and political and security tensions continue to escalate.

Israel-China Ties: The ‘Sticking Point’ with the US?

By Tyler KotlerJuly 11, 2019

At first glance, Israel and China don’t seem like natural allies. China’s population is 160 times larger than Israel’s, and Israel’s geographic size pales in comparison to China’s. The two countries have distinct histories, cultures, and religions, and their indigenous populations come from areas thousands of miles apart. There are major political obstacles too: The US, China’s greatest competitor, is also Israel’s strongest ally.

Nevertheless, Israel-China ties have grown substantially over the last few decades, centering around mutually beneficial economic exchanges.

As China has risen almost unchallenged as the economic powerhouse of the East, it has pushed forward with an aggressive, imperialist expansion plan. Through China’s Belt and Road Initiative, the country has put its full weight behind spreading its economic influence across Asia and into Europe, constructing a vast network of land and sea routes. It has already brought Pakistan, Sri Lanka, and many African nations under its sway, and it’s clear that the government has been eyeing Israel as its next target.

However, this has thrust Israel into the middle of the world’s most prominent great power rivalry, creating a complicated triangle of relations between Israel, the US, and China. Since the fall of the Soviet Union, the US has worked tirelessly to maintain its status as the global hegemon and contain China’s rise to power.

So far, Israeli leadership has been able to walk a fine line between the two countries, but it’s playing a dangerous game that may backfire terribly. With growing concern from the US, the question of whether Israel will fall under the wing of China’s growing influence or remain a loyal enclave of US-oriented foreign policy in the Middle East remains up in the air.

Time will tell. However, the short but eventful history of Israel-China ties can at least explain how Jerusalem ended up in this situation.

Israel-China Ties: A Quick Takeoff

The first signs of ties emerged in 1979 when Saul Eisenberg, a Jewish businessman, set up a secret meeting between the two countries. The gathering resulted in the transfer of defense technology from Israel to China, and by 1992, the countries had established a formalized relationship.

The more important take-off in Israel-China ties has happened within the last few decades, with the two countries strengthening their connections through a multitude of bilateral trade agreements. In 2016, Chinese exports to Israel were an astounding 625 times greater than in 1992, rising from $12.8 million to $8 billion. In the same time frame, Israel’s exports to China jumped by over 70-fold, from $38.7 million to $3 billion.

Chinese companies are investing in and even buying out Israeli companies, such as Tnuva dairy products company and ADAMA Agricultural Solutions. Because Israel is an innovation hub, most of China’s investment has targeted Israel’s tech sector, a golden opportunity that China has jumped at to modernize its rapidly growing economy and, possibly, its military prowess.

Recently, Chinese companies bought out parts of the Haifa and Ashdod ports. In Haifa, a Chinese state-owned enterprise received a 25 year contract to operate a container terminal at the port. Chinese companies are also bidding to help fund the light rail construction in Tel Aviv along with other projects around the country. These ports and rail networks in Israel can stand as critical nodes of China’s Belt and Road Initiative, securing Chinese access to the Mediterranean Sea.

Arthur Herman, senior fellow at the Hudson Institute, gives another example of how investing in Israeli transportation infrastructure is so strategic for China:

One outstanding example of Chinese capital helping to meet Israeli needs while also serving larger Chinese interests is Beijing’s involvement in the so-called “Red-Med” project, a 300-kilometer rail line linking the port city of Ashkelon, just fifteen miles south of Ashdod, to the Red Sea. The Israeli government, which has deemed “Red-Med” economically essential to the country’s future, responded enthusiastically to China’s offer to provide experienced labor and an approximately $2-billion investment. From China’s perspective, however, “Red-Med” forms only one node, albeit an important one, in the network of high-speed rail lines it intends to build across Southeast Asia, Africa, and the Middle East as well as in China itself.

The Red-Med project, along with the Haifa port, the Tel Aviv light rail, and many other investment opportunities don’t just benefit China.

Israel has placed its bets on China, opening its arms to investment projects and economic interdependence with the world’s fastest growing major economy. In just one 2017 visit to China, Netanyahu signed 10 bilateral trade agreements with the Chinese government. Moreover, in May of 2019, China hosted over 100 Israeli startups and thousands of Chinese investors at a business event in the Shandong Province.

China-Israel ties are developing swiftly between high-level officials
Chinese VP Wang Qishan, Israeli PM Benjamin Netanyahu with his wife Sara, and MK Miri Regev at a conference in Tel Aviv in 2018. Photo by Tomer Neuberg/Flash90

China’s foreign investment benefits Israel massively. It decreases the price of construction projects in Israel and opens up a large pools of available capital. Israeli cooperation with China also diversifies its trading portfolio.

Israel-China economic ties have trickled down to academic, cultural, and tourist exchanges as well.

In January of 2015, China and Israel signed the “China-Israel Innovation Cooperation Three-Year Action Plan,” establishing an alliance between Chinese and Israeli universities to expedite cooperation over research and development. Technion and Shantou University, Tel Aviv University and Tsinghua University, and University of Haifa and East China Normal University have all teamed up to build labs and branches of the Israeli universities in China.

Tourism is also on the rise. In just three years, Chinese visitors to Israel jumped almost 300 percent, from 32,400 in 2014 to 123,900 in 2017. By 2018, Israel had finalized direct flights from Ben Gurion airport to four different cities in China.

Yet in Beijing, growing economic ties haven’t fostered much Israel-friendly political change.

Beijing is also expanding defense relations with Iran, Israel’s number one enemy. Meanwhile, Israel’s defense ties and arms sales to India, a rival to China, complicate the situation. Furthermore, China steadfastly votes against Israel in UN decisions, and refuses to permit Chinese workers to work in West Bank settlements.

These are but a few examples of China’s contradicting geopolitical and economic interests.

China’s desire to establish a foothold in the Middle East raises the same security issues the US started to deal with over a decade ago. How should Israel manage its ties with China, a new great power seeking to disrupt the current world order for its own benefit?

Security concerns

The caveat to the mutually beneficial business activity is certain security risks.

Chinese assets in Israel may be dual-use, meaning they can be used in business but also have military applications. Because many companies in China are either state-owned or comply with the government, they may be required to hand over sensitive user data or technology that could modernize China’s military, an outcome the US government fears.

America’s apprehensions of Israel-China ties go back a few decades. In the late 1990s, the Clinton administration pressured Israel to cancel the sale of a Phalconn airborne early warning  and control system to China. Similar pressure in 2004 forced Israel to cancel the sale of Harpy surveillance aircraft leading to a Jerusalem-Beijing rift that took years to mend.

Security risks have also arisen in the telecommunications field. The Chinese company Huawei has already bought two Israeli companies and is now eyeing building 5G telecommunications infrastructure in Israel. Because this may give Chinese companies a backdoor into valuable and user information, US President Donald Trump has declared that US-Israel ties may take a hit if Huawei carries out its plans.

While the US has established the Committee on Foreign Investment in the United States (CFIUS), Israel currently has no body to examine foreign investment and exports out of the country for possible security risks.

Espionage?

A second concern is that a Chinese presence in Israel can be used for spying.

Israel-China ties come to the fore at Haifa Port
The Port of Haifa. Photo by Yossi Zamir/Flash90

The Haifa port, is one notable example. Here, the US Sixth Fleet and many IDF submarines often dock. Once China begins operating part of the port in 2021, it could set up cameras, gain access to radio and cellular networks, and, consequently, monitor US military activities and ship movements.

This puts US-Israel military ties in a tough situation. While the decision to allow Chinese presence in Haifa will boost Israel’s economic development, it shows Israel is prioritizing growth over collective security with the US.

American policymakers are skeptical of this choice. The US Senate’s National Defense Authorization Act for 2020 reflects these sentiments, bringing up “serious security concerns” about the Haifa Port deal with China. With the threat of Chinese surveillance, the US Navy may opt to avoid Haifa altogether.

But others argue there is no need to worry. Yigal Maor, director-general at the Transportation Ministry’s Administration of Shipping and Ports, believes China’s presence in Haifa poses little to no threat, pointing out that that China already has a presence in ports across the Western world, including a large terminal in Seattle.

Allaying fears of Chinese spying, Maor asserted that the Chinese would only have control of about 10 percent of the entire port’s operations, and 98 percent of the workers at the port would be Israeli. The Chinese, he says, are just shareholders of the company.

Caught Between Great Powers

Either way, as Israel’s engagement with China has grown, their relationship has become the one major “sticking point” with the United States.

In April of 2019, Trump put his fist down, making it clear to Prime Minister Benjamin Netanyahu that if he did not retract on Israel-China ties, the US would pull back on some current areas of security cooperation. A few months before, Secretary of State Mike Pompeo also warned Israel that the intelligence sharing would be threatened if Israel did not implement a screening process for Chinese investments, one similar to CFIUS in the United States.

These concerns have pushed Israel right into the middle of the US’s great power rivalry with China. Israel has attempted to walk the tightrope, delicately balancing its economic ties with China and security ties with its biggest ally, the US.

So far, the Israeli government has successfully held the middle ground between the two countries. It has banned the sale of numerous military products to China, but permits most technology and infrastructure investment with little to no oversight.

It’s a dilemma faced not just by Israel but by other US allies who have opened up to trade with China

Looking ahead

US security concerns are not reason enough to break the current Israeli-Chinese relationship. The economic benefits are too high for Israel to backtrack. Rather, concerns should motivate Israel to proceed with caution, ensuring future exports and foreign investment deals are safe and better monitored.

To guarantee Israel can continue striking a balance between the two powers, the 2019 RAND report on Israel-China ties offers suggestions for a path forward between Israel and the United States:

Coordination should be expanded to other areas, aside from defense, and involve other ministries and agencies. The engagements between Washington and Jerusalem should include China as a regular item in discussions and policy decisions. Israel and the United States also should ensure regular information-sharing and joint monitoring of the nature and extent of Chinese investments and economic activities in Israel and in the broader Middle East (including in the Red Sea and east Mediterranean). This is especially important as growing voices in Israel call for developing a process to scrutinize Chinese economic practices more closely.

Overall, Israel should certainly improve its screening processes and initiate greater dialogue with US intelligence officials over Chinese investments. Growing security concerns may prompt US leadership to harden on its threat to break security ties with Israel. However, as long as Israel’s economic partnership with China continues blossoming safely, it will be able to resist pressure to pick a side in the US-China rivalry.

Israel’s current balancing act between the two is a major foreign policy success, maintaining a triangle of relationships that will continue to benefit the small, but powerful, Middle Eastern state.

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