Published: 16 June 2020
Last updated: 4 March 2024
ON MAY 13, US Secretary of State Mike Pompeo visited Israel. Officially, the main agendas had to do with Iran and the West Bank, but it was China that was on everybody’s lips. Like Australia, Israel has been caught in a cold war between a strategic ally and a major trade partner.
There is a history of Israel incurring the anger of the US over its courting of relationship with China, but it used to be over specific deals that were of obvious strategic significance. During the Clinton administration, the US threatened to cease military cooperation with Israel over a prospective sale of its Phalcon aerial surveillance system to China.
This led to a cancellation of the deal, resulting in financial compensation by Israel to the Chinese government. In late 2015, the US became concerned over Israel’s decision to lease the operation of the port of Haifa to a Chinese state-owned company for 25 years.
This in turn led to a warning by the newly elected Trump administration in early 2017 that the deal could prevent future visits by the US Navy to Haifa. America failed to convince Israel to renege on this deal, but it did lead to the setting up of a foreign investment committee within the Knesset to vet all foreign investment proposals.
This time, however, Trump’s targets are much wider, reflecting increased sensitivities and anxieties about China’s expansion into the Middle East. As reported in Breaking Defence on May 13, Pompeo simply no longer wants to see “no more Chinese deals!”
For example, he warned Israel about the deepening of cooperation between Israeli academics and Chinese academics on a range of projects, covering from IT, nanotechnology to biosciences.
Pompeo was also unhappy about any Chinese infrastructure investment in Israel, even if they are coming from Hong Kong based private companies, such as the proposed tender to build a desalination plant at Sorek 2 by a Hong Kong based company, CK Hutchison, formerly headed by Li Ka-shing, a Hong Kong tycoon who also funded the establishment of Technion’s campus in his ancestral hometown of Shantou in Guangdong province.
While there are suggestions that the proximity of the proposed desalination plant to a nuclear power facility might pose a security risk, it probably would not have mattered if the desalination plant was on the other side of Israel.
To allow any Chinese company, even a Hong Kong company, to build a desalination plant in Israel is simply unacceptable for the Americans who are in the midst of a cold war with China. Shortly after the visit, Israel awarded the deal to an Israeli company. It was simply not worth risking the wrath of a temperamental president.
Pompeo also raised concerns about a deal signed on April 8 between Israel’s AID Genomics and Shenzhen-based private Chinese company called BGI Genomics to cooperate on setting up Covid-19 testing facilities in Rehovot, West Bank and Gaza.
This complaint was not just targeted at Israel, but also other US allies in the Middle East who have signed the agreement to build Covid-19 testing facilities, such as the UAE and Saudi Arabia.
Yet there is much for Israel in this Covid-19 testing deal. While Israel appeared to have “flattened the curve” and is considered a member of the “first-movers club”, this was not the feeling in Israel during late March and early April, and the fear of second-wave continues to hover over policy-makers.
BGI Genomics is one of the very few genomics companies with experience of large scale Covid-19 testing in Wuhan. Most importantly, its Covid-19 testing kit, known as ‘RT-PCR kit’, can provide real-time testing of Covid-19 with a turnaround time of three hours, and received emergency approval from the US Food and Drug Administration on March 3.
Geopolitically, the deal also pays some dividends for Israel, as it allows Israel to set up testing facilities in Hamas controlled territory and it further facilitates collaboration with researchers from China and the Middle East.
Thus far, Israel has politely sidestepped America’s request to revisit or cancel this deal with BGI, but the problem of how to do business with China without angering your ally remains. Carice Witte from SIGNAL, a think tank on Israel-China relations, has argued that Israel needs to take America’s concerns into consideration in any future trade deals with China, and avoid cooperation over any “dual-use” technologies with civilian and military purposes.
The problem is that it is getting harder to delineate between pure civilian technology and dual-use technology, as evident by the recent furore over Huawei’s investment in 5G technology. Besides, in a polarised and partisan geopolitical environment with heightened sensitivities about Chinese investment and cooperation, the merit of any deal might be beside the point. That is unless Israel can articulate a clear policy regarding its ongoing relationship with China.
READ MORE
Pompeo warns American Jewish Committee: China Is 'growing challenge' for Israel, US (Haaretz)
Speaking at virtual annual conference, secretary of state says Trump administration considers China a threat to American 'way of life', slams human rights abuses
Photo: BGI headquarters in China
