Which is why, when I think about the future of relations between the United States and Israel, my mind these days turns far more to China than to Reps. Ilhan Omar and Rashida Tlaib. How the United States and Israel address China’s rising power could be a source of either great peril or great promise for the broader relationship. Get it wrong, and China risks becoming a point of chronic contention. Get it right, and the challenge of dealing with China could boost U.S.-Israel strategic cooperation, which is already deep and expansive, to a new level.
Immediate tensions over China arise from the dramatic shift in U.S.-China policy that the Trump administration signaled when it issued its first National Security Strategy in December 2017. For decades before Donald Trump became U.S. president, Washington has operated under the view that offering Beijing a steady stream of inducements and accommodations could make it a responsible stakeholder in the existing rules-based international system. But years of predatory economic policies, escalating militarism in the South and East China Seas, and deepening authoritarianism within China have put the lie to that dream. It turns out that the Chinese Communist Party (CCP) has its own dream—which doesn’t include being a junior partner in a U.S.-led order based on democracy and free markets. China’s ambition is not to be a subsidiary of Pax Americana, but to displace it in favor of a world where Beijing increasingly calls the shots, and where dictatorship and state-controlled economies are the norm.
To its great credit, the Trump administration recognized this reality and has taken long overdue action to reorient U.S. policy accordingly. The result has been one of the sharpest about-faces in the recent history of U.S. national-security strategy. Almost overnight, China as a responsible stakeholder was out and China as a strategic competitor was in. In an era of extreme political polarization, remarkably large bipartisan majorities in Congress now support the administration’s overall view of China as the United States’ most threatening great-power rival, if not its most dangerous adversary.
While Washington’s precise policy responses remain a work in progress, the broad contours are visible, marked by a new hawkishness not simply on trade and technology, but across the board in military, intelligence, diplomatic, and ideological realms as well. Though the long-term implications of this escalating geopolitical friction remain difficult to discern in full, it’s hard to escape the feeling that we are in the midst of a strategic unraveling, or decoupling, of not only the planet’s two most powerful nations, but its two largest economies—a development largely without historical precedent.
Not surprisingly, the head-snapping speed of the U.S. policy shift caught many U.S. allies, including Israel, by surprise. Israeli Prime Minister Benjamin Netanyahu has for years prioritized the expansion of relations with China, especially economic cooperation. These deepening ties have manifested in two main ways. The first was a major increase in Chinese investment in Israel’s extraordinarily dynamic high-tech sector, including direct investments in Israeli start-up companies, participation in Israeli venture-capital firms that invest in dual-use technologies, and the establishment of research and development centers in Israel. In March 2017, Netanyahu proudly announced the creation of a “comprehensive innovation partnership” between Israel and China. And as recently as October 2018, China’s influential vice president, Wang Qishan, visited Israel to take part in the China-Israel Joint Committee on Innovation Cooperation.
While precise data is hard to come by, varying estimates suggest that in the past several years, Chinese money has played a role in anywhere between 12 to 25 percent of Israel’s booming civilian tech industry, involving billions of dollars and potentially hundreds of companies. The investors include some of China’s largest and most well-connected firms, including Huawei, ZTE, Alibaba, Tencent, Baidu, and Kuang-Chi—almost all of which have links to the CCP, People’s Liberation Army, and/or the Chinese intelligence and surveillance apparatus. Chinese investment targets in Israel run the gamut of cutting-edge technologies, from big data and artificial intelligence to cybersecurity, robotics, autonomous vehicles, and beyond.
Chinese investment targets in Israel run the gamut of cutting-edge technologies, from big data and artificial intelligence to cybersecurity, robotics, autonomous vehicles, and beyond.
The second mainline of Chinese operations in Israel has been in the area of infrastructure. Until recently, Israel was an enthusiastic partner in China’s Belt and Road Initiative, an ambitious project to pour hundreds of billions of dollars into a Chinese-led global network of ports, railways, roads, pipelines, energy grids, and other associated infrastructure projects. During his 2017 visit to China, Netanyahu said, “The Israeli side is ready to actively participate in infrastructure and other cooperation under the framework of the Silk Road Economic Belt and the 21st Century Maritime Silk Road.”
At least $4 billion worth of projects are already underway. Chinese state-owned companies have been heavily engaged in constructing facilities at Israel’s two Mediterranean ports, Haifa and Ashdod. At Haifa, one of those companies will operate parts of the port for 25 years—in relatively close proximity to Israel’s main naval base, a regular stop for ships from the U.S. Sixth Fleet. At Ashdod, the main Chinese firm is part of a company that has worked for the Chinese military, including in the South China Sea. Other major projects involving Chinese state-owned firms include Tel Aviv’s light-rail system, whose underground tunnels will run not far from the Kirya, the headquarters of the Israel Defense Forces.
Deepening economic cooperation between Israel and China that might have gone unnoticed for much of the past few decades is now setting off alarms in Washington. In 2019, several senior U.S. officials, including former National Security Advisor John Bolton and Secretary of State Mike Pompeo, have traveled to Israel and reportedly issued stark warnings about the dangers posed by China’s growing penetration of Israel’s high-tech and infrastructure sectors. In an interview on Israeli television in March, Pompeo noted that the involvement of Chinese firms and technology in sensitive economic projects “present real risks to the people of Israel.” He also warned that it could threaten U.S.-Israel cooperation. “America’s efforts to work alongside you will be more difficult,” Pompeo warned, “and in some places we won’t be able to do so. Intelligence sharing might have to be reduced, co-location of security facilities might have to be reduced.”
At the core of newfound U.S. concerns is the enormous priority that China has placed on acquiring advanced technologies to catalyze its military modernization and economic expansion at the expense of the United States.
At the core of newfound U.S. concerns is the enormous priority that China has placed on acquiring advanced technologies to catalyze its military modernization and economic expansion at the expense of the United States. Through difficult first-hand experience, Washington has watched as Beijing for years used its access to the U.S. high-tech and industrial sectors to grow increasingly rich, powerful, and threatening to U.S. interests—using both licit (direct investment, joint research-and-development programs, collaboration with universities) and illicit means (espionage, cyberpenetrations, intellectual-property theft, forced technology transfers). In light of Israel’s emergence as one of the world’s leading hubs for science and technology, there’s every reason to worry that China intends to exploit its expanding presence there similarly to disadvantage U.S. interests.
China appears determined to dominate the coming revolution in military affairs triggered by powerful new technologies such as artificial intelligence, quantum computing, autonomous mobility, bioengineering and 5G telecommunications. The CCP’s Made in China 2025 program made clear that achieving Chinese supremacy in cutting-edge technologies is among the country’s highest priorities. At the same time, Chinese President Xi Jinping has elevated the concept of “military-civil fusion” to a national strategy to ensure a seamless flow of technology, information, and material from Chinese businesses and citizens to the military. In 2017, Xi established the Central Commission for Integrated Military and Civilian Development, with a powerful vice premier in charge, to drive this strategy forward.
For U.S. officials, the implications of Xi’s approach are clear, far-reaching, and ominous. “If any given technology is in any way accessible to China, and officials there believe it can be of any use to the country’s military as Beijing challenges Washington for leadership in the Indo-Pacific, one can be quite sure that the technology will be made available for those purposes,” said Christopher Ford, the U.S. assistant secretary of state for international security and nonproliferation. Under Xi, trying to make distinctions between Chinese civilian and military end users for the purpose of guiding tech-transfer policy is increasingly futile. According to Ford, China’s civil-military apparatus is specifically designed with the purpose of exploiting any new technology or information for military gain, no matter how innocuous or seemingly civilian in nature—up to and including, he claims, casual shop talk with a visiting colleague from China.
Ford is almost certainly correct when he says that the United States and its international partners urgently need to rebalance their approach to China—between the tremendous economic opportunity of the Chinese market, on the one hand, and the very real national-security risks posed by collaborating with entities that must ultimately take orders from the Chinese Communist Party, on the other. Under Trump, it’s clear that the United States is now doing precisely that. Israel needs to follow suit—the sooner the better.
This is not the first time that China has posed a major risk to the U.S.-Israel relationship. In the late 1990s, Israel was forced under extreme U.S. pressure to cancel the sale of an advanced airborne early-warning system to the Chinese military. In 2005, when I was working in the administration of President George W. Bush, an even more serious crisis erupted over Israel’s contract to upgrade Chinese military drones that potentially posed a direct threat to U.S. forces in the Pacific. While Israel in the end again canceled the deal and actually ceased all future military sales to China, I vividly recall high-level meetings at which U.S. officials made clear that Israel’s dealings with Beijing threatened a fundamental rupture in the strategic relationship. The challenge now is to ensure that history doesn’t repeat itself when it comes to expanding Israel-China ties on sensitive high-tech and infrastructure issues.
The high-level U.S. warnings about China already seem to have had some effect. A year ago, my conversations with senior Israeli officials about the risks associated with Beijing’s growing role in Israel’s economy drew mostly blank stares. They just didn’t get it. That’s no longer the case. Israel’s leaders are now acutely aware of the problem and the dangers it could pose to the U.S.-Israel strategic partnership if left unattended. As a first step, they’ve already privately assured Washington that Huawei will have no role in building Israel’s 5G telecommunications infrastructure—a top U.S. priority. Some Israeli officials—including Nadav Argaman, the head of Shin Bet, Israel’s internal security service—have warned of potential security concerns. More broadly, the Israelis have promised to establish their own analogue to the Committee on Foreign Investment in the United States, an official interagency process that for the first time would systematically weigh the economic benefits of foreign (read: Chinese) investment in Israel against the potential national-security risks. Regardless of the outcome of this week’s Israeli elections, in which the China-Israel relationship was not a prominent campaign issue, the United States should work with Israel’s new governing coalition to put these measures in place.
Given the high stakes involved, the United States and Israel would be wise to make China policy an official part of their regular strategic dialogues.
Given the high stakes involved, the United States and Israel would be wise to make China policy an official part of their regular strategic dialogues. The issue is too important to be left to standard bureaucratic practice. A formal working group should be established to ensure constant interaction on the nature of the threat, priority areas of U.S. concern, and best practices for mitigating risks without unnecessarily escalating tensions with Beijing. The United States has vast and unique experience regulating foreign trade and investment with national-security concerns in mind, including extensive intelligence regarding China, which could be enormously useful to Israel as it works to put its own processes and protections into place. Institutionalizing regular consultations is the best way of ensuring that the United States’ legitimate concerns regarding Israel’s relations with China are fully addressed in a timely matter and not permitted to fester into a major irritant for their broader strategic relationship.
But the Trump administration’s ambitions should go well beyond simply making sure that Israel doesn’t become a source of problems for U.S. strategic competition with China. The real goal should be ensuring that Israel, an emerging technological superpower, becomes one of the United States’ most important assets in the coming struggle with China for global high-tech preeminence.
In recent years, U.S.-Israeli cooperation has already helped achieve major advances in areas such as missile defense and anti-tunnel technologies. The United States is now adopting many Israeli systems to help protect U.S. forces in the field, including Iron Dome batteries for shooting down short-range rockets and Trophy armor protection for defeating anti-tank missiles. Given how central the mastery of emerging technologies will be to the 21st century’s global balance of power, Washington should now be doubling down on expanding its ability to access and exploit Israel’s world-class high-tech capabilities. Ideally, in order to maximize opportunities for joint research-and-development work, serious consideration should be given to adding Israel to the short list of America’s closest allies (Canada, the United Kingdom, and Australia) who are formally included as part of the U.S. National Technology and Industrial Base. At the same time, within the current framework of U.S.-Israel strategic cooperation, a new bilateral group should be formed that would prioritize joint efforts to develop new strategic technologies, institutionalize a new U.S.-Israel defense innovation alliance, and ensure the supremacy of the United States and its allies over the current revolution in military affairs and the future of multidomain warfare.
China confronts the U.S.-Israel alliance with real risks, but also tremendous opportunity. Thankfully, the decision on which direction it goes lies almost entirely in the hands of policymakers in the United States and Israel. Working together in close consultation, with the protection and strengthening of the alliance uppermost in their minds, they should make sure that China becomes the catalyst for the next major leap forward in the U.S.-Israel partnership rather than an a dangerous source of division.
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