Israel between the United States and China: Strategic Ties and Tensions

Sarah Kuszynski is a recent postgraduate student of Durham University, with an interest in global security, technology and Middle Eastern affairs. She is also passionate about the promotion of free speech on campuses.

As Israel enters a new era of relations with the Gulf nations following the Abraham Accords, there is another challenge that Israel should not neglect – China. Israel’s increasing ties with and investment from China has implications for security, prosperity, and the continued strength of the United States-Israel partnership. The Trump administration instigated the most radical shift in US-China policy since Nixon’s famous Beijing visit, and a central tenet of Biden’s foreign policy is also to counter China’s ascendancy. In these shifting sands of foreign policy, Israel has found itself collaterally involved in the US-China struggle for global hegemony, thereby straining historically strong US-Israel ties. As the US-China geopolitical struggle plays out, the US must double down on its commitment to Israel and Israel should exercise greater transparency and coordination with the Biden administration – in order to prevent Israel-China strategic dependence. Avoiding this will enable Israel to better protect its technology-driven economy and mitigate the risks of a China-shaped wedge forming between the US and Israel.

Israel plays a key role as a strong and dependable US ally that acts to bolster regional security. This role in securing US regional interests will only grow in importance as the US seeks to reduce American boots on the ground in the Middle East. This partially explains the need for US Defence Secretary Lloyd Austin to declare an “enduring and ironclad” commitment to Israel. There is much substance behind his statement considering that the US is the largest investor in Israel, providing Israel with annual security assistance against a panoply of threats across the region. Conversely, Israeli investments in the US sustain nearly 100,000 American jobs. There is also much historical precedent for a high level of commitment: the US was the first nation to recognise the new Jewish State. Hence, at the heart of the ‘enduring’ alliance are the shared values of the two democratic nations. As John F. Kennedy stated, “from the time of President Woodrow Wilson… [the US] has established and continued a tradition of friendship with Israel because we are committed to all free societies that seek a path to peace and honour individual right”. The US has thus consistently supported Israel as a pillar of stability in the broader Middle East.

Despite the above ties, bilateral relations between the two allies are not without their tensions, and growing Chinese influence is certainly one such source. Israel-China ties have steadily developed since diplomatic relations began, with bilateral trade increasing from $50 million in 1992 to $15.3 billion in 2018, reflecting the Communist Party’s strategy of Zou Chuqu, or “going out,” and more recently the Belt and Road Initiative (BRI), which aims to construct a Digital Silk Road around China. These strategies are proving successful as China is now Israel’s second-largest trading partner – after the US. This is not insignificant as Israel has the highest per-capita production of Intellectual Property (IP) in the world. The “start-up nation” is thus uniquely susceptible to Beijing’s coercive economic pressure. Even more critically, Israeli innovation falls into areas such as artificial intelligence algorithms, quantum encryption, and nanotechnology. These capabilities are vital for the US in a geopolitical struggle that is likely to be defined by technological and economic competition. Thus, growing Chinese influence in Israel has led to the very real fear that Beijing will gain access to dual civilian-military technology and employ Israeli innovation to bypass the R&D spending required for IP production, thereby gaining a military edge over the US. These are all tangible reasons for the US to redouble its commitments to Israel’s security and disincentivise Chinese investment.

Surprisingly, given the technological foundations of Israel’s economy, it took Israel until 2019 to establish a board for reviewing foreign investments. Hence, continued US pressure and rapid expansion of the review process will be vital to prevent further civil and military infrastructure from coming under Chinese ownership. Notably, US pressure for restricting the sale of sensitive technology has been applied in the past. In 2000, Israel reversed the sale of the Phalcon advanced airborne early-warning system to China and since then Israel has restricted direct military technology relations with China. However, Chinese companies have continued to be involved in major Israeli infrastructure projects, and as is typical with Chinese ventures, ‘private’ companies have significant ties to the Chinese military and Communist Party. Such ventures have included the construction of a light rail in Tel Aviv, the digging of the Carmel tunnels, and the extension and lease of the Haifa port. China’s long-term lease of Haifa port will most likely harm US security interests as the port is of great intelligence value to China vis-à-vis the US and bestows Beijing with the power to penalise Israel economically with slowdowns in shipping. This demonstrates that China’s investment in Israel is a systematic and strategic part of President Xi’s drive to supplant the US as the global power through projecting its influence in the Middle East.

In summary, the United States and Israel face overlapping challenges from Chinese access to vital infrastructure and intellectual property. Obviously, Israel wishes to encourage foreign trade but at the same time needs to establish clear procedures to contain Chinese expansionism. Consequently, Israel finds itself in a precarious situation between the global powers. Israel must take the threat from China seriously and in return for doing so, the US needs to reinforce its ‘ironclad’ commitment by providing technical and economic assistance, signalling to Israel the strategic and financial benefits of limiting Chinese influence. Only then will China-US tensions be prevented from souring relations between the long-time allies. Finally, addressing this challenge sooner rather than later, will help to lay better foundations for a coalition of democratic nations that can effectively counter the economic coercion that China uses to undermine the liberal international order.

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