China investments undermining US support for Israel including annexation
Israel’s continued openness to Chinese involvement in major
infrastructure projects is undermining some Trump administration officials'
support for a continued strong Israel-US relationship, including backing a move
to apply Israeli sovereignty to parts of the West Bank, a US official told The
Jerusalem Post on Monday.
The warning came as US Ambassador to Israel David Friedman
headed to Washington for meetings in the White House to determine the US
position on the sovereignty options Israel is considering.
The US official spoke weeks before a tender to build two
lines of the Tel Aviv light rail was set to close, and three of the six
international groups bidding for it include Chinese state-owned companies, most
of which worked on railway projects in Iran.
The US official warned that “the Israeli government is trying
to have it both ways with us. It wants approval for annexation and the
continuation of beneficial economic, diplomatic and security ties, while
opening the door to China in critical infrastructure projects [such as] 5G and
the light rail.”
Israel’s behavior is “raising eyebrows” in Washington, “even
with strong pro-Israel supporters in the administration,” the source said.
However, an official from another part of the Trump
administration called it “absurd” to think that US support for moving forward with
the Trump peace plan would be linked to China policies. He rejected the notion
that annexation was connected to China.
Still, the official admitted that all elements are factored
into the US-Israel relationship.
The US has been asking its allies in recent months to sever
ties with China in areas with security risks and reduce its economic ties to
China more broadly.
Secretary of State Mike Pompeo reiterated this position in a
speech to the Virtual Copenhagen Democracy Summit on Friday, saying “the
Chinese Communist Party strong-arms nations to do business with Huawei, an arm
of the CCP’s surveillance state. And it’s flagrantly attacking European
sovereignty by buying up ports and critical infrastructure, from Piraeus to
Valencia.
“Every investment from a Chinese state-owned enterprise
should be viewed with suspicion,” he added, calling on US allies to “take off
the golden blinders of economic ties.”
Yet the NTA - Metropolitan Mass Transit System’s NIS 15
billion tender to plan, build and maintain the systems and train cars for the
green and purple lines of the Tel Aviv light rail has remained open to Chinese
companies.
Submissions for the tender, which is in the
pre-qualification stage, end in July, and a winner is expected to be chosen by
December. Six international construction groups have bid to build the light
rail lines, three of which include Chinese companies, which are state-owned.
US concern about Chinese companies’ involvement in major
infrastructure projects in Israel, which Pompeo expressed during his visit to
Israel last month, is partly due to the ability of Chinese operatives to gather
intelligence while working on them, as well as the massive economic, social and
environmental losses, and even casualties, which could be inflicted if that
infrastructure is damaged.
Last month, amid major pressures from the Trump
administration, Israel selected a local company, IDE Technologies, rather than
Chinese firm Hutchison, to construct Sorek 2, the world’s largest desalination
plant.
Beyond the concerns the US has about any Chinese company’s
involvement in critical infrastructure, nearly all of the companies bidding to
build the Tel Aviv light rail have ties with Iran. The difference between
Chinese companies that do business with both Israel and Iran and other
companies is that the Chinese ones are state-owned and the government is
directly involved in their actions.
China Railway Engineering Corporation is building a
high-speed rail line in Iran between Tehran and Isfahan via Qom, as well as a
second subway line for the city of Ahvaz. China Harbour Engineering Company has
a branch in Iran, China Communications Construction Company signed an agreement
to work on the Tehran-Shomal Freeway in Iran. In addition, China Railway
Construction Corporation built a 263 km railway line between Kermanshah and
Khosravi in western Iran, and CRCC, the world’s largest supplier of rail
transit equipment, has supplied Iran with 100 subway cars.
These partnerships are being weighed even after Israel has
repeatedly called for Europe to join US sanctions on Iran.
A report by the RAND research institute for the US
Department of Defense published this year warned that China has close ties with
Iran, and that “the Chinese government might require Chinese companies doing
business in Israel to share insights with the Iranian government in order to
win friends and influence in Tehran.”
China could also try to use the fact that the same companies
build infrastructure in Israel and Iran to try to put political leverage on
Israel to support its positions. It has used this kind of leverage in the past,
such as in 2013, when it conditioned a Beijing visit by Prime Minister Benjamin
Netanyahu on his stopping defense officials from testifying in a New York
federal lawsuit against the Bank of China for laundering Iranian money for
Hamas and Palestinian Islamic Jihad.
Former Shin Bet (Israel Security Agency) official Harel
Menashri went even further, warning in the RAND report that “if Israel seeks to
strike Iran, China could damage infrastructure operations in Israel to signal
to Israel that it should not attack.”
The US has specifically encouraged Israel to establish a
more robust system of weighing the risks of foreign infrastructure investments,
similar to the Committee on Foreign Investments in the US.
Israel has a committee on foreign investments, established
late last year, with representatives from the Finance and Defense ministries
and the National Security Council, but its recommendations are nonbinding, and
it does not have the power to cancel deals.
It is also voluntary, meaning that regulators in different
fields can choose whether to bring a potential investment before the committee.
In addition, investments that don’t already need government approval won’t be
brought to the new committee at all.
The committee only gives advice on investments in finance,
communications, infrastructure and energy. This excludes the tech sector, the
category in which most Chinese investments in Israel in the last decade falls
under.
In addition, since the committee was not formed through
legislation, there is almost no transparency about its membership or mandate
and none at all about its meetings.
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