Has the winds of the neo-cold War reached Tel-Aviv?
As USA’s trade war with China continues to intensify, Israel’s growing warmth towards China must be becoming increasingly alarming for Washington DC
On May 14 1948, Israel's founding father, David Ben-Gurion, announced to the world the inception of the first Jewish state in over 2,000 years. The USA was the first country to recognise their sovereignty, and have remained their closest ally and patron till date. Thenceforth, they maintained a prosperous relationship where the US provided hefty contributions in ways more than military or trade and in return, Israel has developed supreme military, intelligence, and technological capability and has successfully kept USA's adversaries in that region in check.
The USA-Israel Free Trade Agreement (FTA) took effect in 1985 and is the United States' first FTA. Ever since its inception, it has been serving as a foundation for enhancing trade and investment between the USA and Israel by significantly reducing the legal hurdles while emphasising on regulatory transparency. Since 1985, when the United States-Israel FTA came into force, US exports to Israel have risen by an astounding 456 percent.
In 2016, a bilateral military aid memorandum of understanding (MOU) was signed by the US and Israel that would ascertain a hefty $3.3 billion annual payment in Foreign Military Financing from the fiscal year 2019-2028. In addition to military aid, US companies have invested heftily on the concept of "start-up nation." US funding made it possible to establish two-thirds of the more than 300 foreign-invested research and development centres in Israel. Israeli firms, meanwhile, represent the second-largest source of foreign listings on the NASDAQ, second only to China. Israel too has reportedly invested nearly $24 billion in the US economy, a number that has tripled in the past decade.
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Despite their seemingly blossoming relationship, frustrations must be growing in Washington DC as Israel's approach towards China continues to appear more and more receptive, amidst a clash of global supremacy, mimed as a trade war, wages on between the USA and China. In a bid to prevent the two countries from forging a strong working relationship, in the past few decades, the USA has intervened in multiple occasions when Israel committed to granting contracts for mega-projects to Chinese companies.
In 2018-19, another conflict arose over Israel's decision to allow a Chinese company to manage Haifa Port. In 2015, Israel signed an agreement with the Shanghai International Port Group (SIPG) – a company in which the Chinese government has a majority stake – to upgrade and manage the port in Haifa. The US Sixth Fleet and other naval vessels frequently use the port and Washington is concerned that China will use its access to gather intelligence on American ships and other regional interests. The United States was pressuring Israel to cancel the deal.
On May 13, 2020, amidst a global pandemic, Mike Pompeo, US Secretary of State, personally paid a visit to Tel Aviv to apply pressure on Israeli officials to cancel a tender for desalination project almost certain to be given to Hutchison Water International, a Hong-Kong based Chinese company. There were other instances as well where the USA attempted to disrupt deals between the Israelis and the Chinese. For example, in the 2004-05 period, China sent several Harpy drones that had been purchased from Israel in the 1990s back to Israel for technological updates and servicing. The Israeli government returned the drones to China without the update, evidently due to US pressure.
US meddling in Israeli-Chinese affairs did not entirely manage to discourage Chinese advances. Rather, it has undermined Israel's sense of sovereignty and their general image in the region as well as globally. Israel also had to suffer economic damage as they had to pay compensation for breaching several contracts they made with Chinese companies due to US pressure.
As a nation that takes pride in its ability to develop high-end technology, losing the Chinese market, as their domestic market is far too small, poses a grave economic threat worth nearly $1.5 billion.
Although the US has, time and time again, reinforced their display of support towards Israel, such as when the Trump Administration supported moving the US Embassy to Jerusalem, the relationship between the sides may no longer be as airtight as it once appeared. As their largest trading partner, as well as key economic and military patron, Israel's inclination towards courting Chinese investment, especially at a time of hostility between them, must not bode well with the Americans.
As opposed to their relationship with the USA, Israel did not always share a strong relationship with China. In fact, until the 1980s, China refused to grant visas to Israelis unless they held dual citizenship and subsequently carried a passport of a country other than Israel. Following the Sino-Soviet split, and China's 1979 establishment of diplomatic relations with the United States, China and Israel began to secretly build military ties. Both countries supplied weapons to Mujahideen to propel their combat effort against the Soviet Red Army during their occupation of Afghanistan from 1978-1989.
The momentum at which Israeli-Chinese relations are developing is surely impressive, and might even potentially contribute to maintaining stability in the Middle East as China will surely attempt to broker a reconciliation between them and their hostile neighbours, as they are a key trading partner as well as friend and ally to most of them. Which, very rightfully so, is worrying the Americans. Sino-Israeli trade has grown from 10.9 billion US dollars in 2014 to almost 14 billion dollars in 2018, making them their third biggest trading partner. From 2015 to 2018, the number of Chinese visiting Israel almost tripled from less than 50,000 to 139,000, and it is expected to reach 170,000 this year.
China and Israel have developed close strategic military ties with each other. Bilateral military relations have evolved from an initial Chinese policy of secret non-official ties to a close strategic partnership. Israel has provided China with military assistance, expertise and technology. According to a report from the United States-China Economic and Security Review Commission, "Israel ranks second only to Russia as a weapons system provider to China and as a conduit for sophisticated cutting edge military technology, followed by France and Germany."
As the relation between Israel and China continues to develop steadily and Israel's economy keeps growing while their relationship with their historically hostile neighbours remains stable, it seems likely that Israel may choose to turn a blind eye to the ever-growing bitterness between China and their oldest and closest ally, the USA. Nevertheless, China's position on Israel's potential annexation of the West Bank will play a pivotal role as to whether the Sino-Israeli relations will prevail or crumble, it seems highly unlikely that they will intervene, despite maintaining strong ties with the Palestinian leadership as well.
Wasif Jamal Khan, President, Bangladesh Forum for Legal and Humanitarian Affairs (BFLHA).
