management given to Chinese business prompts U.S. threat not to sell technology to Israel

The protests of the Trump Administration for having awarded the management of the port of Haifa to a Chinese business have not yet led the Netanyahu government to review the contract, which was processed at ministerial level without a plenary session of the Executive Council knowledge of its geopolitical implications. Chinese penetration in Israel - in the broader context of the Middle East - as well as the reaction of the United States, highlights a complicated triangle of relations: Israel wants Chinese investment, but fears losing American favor.

▲ container management at the port of Haifa, northern Israel [Wikipedia].

article / María Martín Andrade

The port of Haifa is one of Israel's main ports in terms of cargo throughput Issue It also has a strategic character: the port, in the north of the country, hosts the U.S. Sixth Fleet in its movements. The latter could be altered following the announcement of Israel's contract with the Chinese business Shanghai International Port Group (SIPG) to operate the port for the next 25 years starting in 2021, which has not been very well received by Washington. The company, which has pledged to invest $2 billion to expand the facility into Israel's largest port, describes its functions as including the construction and installation of equipment and the day-to-day management of port activities, classifying the project as part of the One Belt, One Road initiative.

This initiative has its origins in the Silk Road, a trade pathway that linked China with various countries on the Asian continent until it reached Europe, and which dates back to the first centuries BC. The new version is based on the early schemes and aims to boost China by creating a network of infrastructure, investment and trade, and by establishing multilateral and bilateral ties with the various states along it, as well as with international companies.

All of the above, added to the growing industrial and transportation expansion that China is experiencing, also justifies the Asian country's interest in some of the natural resources that the Middle East offers, such as oil, which imports account for 50% of the total, which is another reason why China wants to gain a presence in different parts of the region and which is manifested, among other things, in its investment in canals and ports such as those of Haifa and Ashdad in Israel, Cherchell in Algeria, Said and Alexandria in Egypt, and Kumport in Turkey. Specifically, its investment in the port of Haifa is also contributing to the development of the Israel-Gulf Economic Corridor (IGEC), whose goal is to create a railway line that runs from the port of Haifa to the Jordanian-Israeli border, linking it to the Jordanian railway system.

However, China's ambitions to gain a greater presence in the Middle East collide with the pretensions of another "robust rival", the United States, which, also motivated by economic and security interests, has landed much earlier in the region and has no intention of sharing it. Thus, after learning of the plans in the port of Haifa, the U.S. response is manifested in threats that it might stop sharing intelligence data with Israel and reconsider holding future long-term exercises by the U.S. Navy in that port.

It is important to note that this is not the first time that the United States has intervened to hinder relations between China and Israel. The conditions under which the latter country was established, added to the hostile environment that surrounds it and the need to possess weapons to maintain and protect it, have contributed to the development of its technology, especially in defense subject , whose broad scope is due in part to the United States, which has been supplying the country with the latest in military technology since the 1960s. All this has contributed to the fact that Israeli exports in technological subject , mainly in defense subject , have become the main source of income for its industry.

During the 1970s, Chinese Economics began to modernize, and the next step was to extend this modernization to the military domain, so China began importing defense developments from Israel. These relations continued to expand until 2000, when the Middle Eastern country, under U.S. pressure, decided to cancel the agreement that allowed China to obtain four Phalcon radar systems. The reason given at the time by the United States for opposing the agreement was the possibility that China would benefit from this technology in a military conflict in Taiwan. However, China is not the only country with which Israel has had difficulties exporting its technology. In 2008, Washington denied that it could submit Heron drones to Russia.

Despite all this, Sino-Israeli relations have managed to survive, with China becoming Israel's second largest trading partner in 2012, as well as developing new R&D partnership ties, consisting of a series of agreements and collaborations between academic institutions and companies from both countries.

However, considering the reaction of the United States to the Chinese involvement in the port of Haifa, it is not unthinkable to envisage a scenario in which American pressure would be repeated, in this case succeeding in abolishing the existing agreement with the Shanghai International Port business . If this happens, Israel would lose an important part of the investments it receives and trade relations with China would cool down, while Beijing could see one of its plans to create its ambitious Silk Road frustrated, although this would not mean its decline in the Middle East.

 What is unquestionable is that the United States no longer enjoys hegemony in this part of the world and has to come to terms with the idea that it will have to share influence with other great powers. That is why it may be more logical to achieve new forms of cooperation with China in order to establish mutually favorable conditions.

In conclusion, this new Chinese investment affirms what was already known: China's international presence is increasing and becoming more and more Issue, and it is wiser to adapt to the new changes than to get involved in love triangles that never have a happy ending for anyone.