Political Analysis: Israeli Status in the Chinese Belt and Road Initiative Project

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Introduction

In 2013, the Chinese Communist Party (CCP) discussed a strategic project called (after many name changes) the Belt and Road Initiative (BRI), and in 2014, it was officially adopted and launched. The initiative, which is supposed to be completed in 2049 (on the centennial anniversary of the People’s Republic of China) is based on two central dimensions that include an overland network of railways, paved roads, and power stations, connecting the three continents (Asia, Africa and Europe); and an overwater network (ports) to stimulate trade relations between the three continents. There are 63 countries located along this network, out of which 13 are Arab countries, which have signed memoranda of understanding (MOU) concerning this project with China; and they are the six Gulf Cooperation Council (GCC) countries, Yemen, Iraq, Egypt, Jordan, Syria, Lebanon and Palestine, (see map) in addition to Israel.

The Importance of the Chinese Project to Israel

The Israeli decision-makers realized the importance of the BRI from several angles:

1. It comes at a time when the US strategic tendency is to gradually and quietly disengage from the deep US involvement in the Middle East, and particularly when China is the number one trading partner of the Middle East. The conditions of US energy independence from the Middle East oil have increased, and there is a European reluctance to expand the scope of NATO’s work outside the European framework, which in turn increases the burdens on the US. In addition, Russia seeks to ensure a secure Middle Eastern environment as a strategic belt for its Eurasian project and that would narrow the movement area of the US strategy. For there is a high degree of Chinese-Russian harmony, where both are members in international, regional and intercontinental organizations, not to mention the overlap between the Eurasian project and the BRI.

2. There is an Israeli concern over the prospect of “gradual militarization” of the Chinese project, which necessitates thinking deeply of how to deal with this possibility, whose signs began with the establishment of China military base in Djibouti. A Pentagon report that was submitted to the US congress has outlined this possibility. It indicated that there is a possibility of establishing additional military bases in Pakistan and in countries that have a precedence of for hosting foreign military bases, especially in the Middle East. [1]

3. Israel is thinking about how the Chinese project would affect European-Israeli relations, especially in light of the sharp reaction of some European countries and the US to Italy’s announcement of its participation in the BRI, where the latter is the only one among the seven countries that took this stand

The Israeli Role in the BRI [2]

The Israeli contribution to the Chinese project can be determined by:

1. The construction of a railroad from Eilat to Ashdod ports to connect the Red Sea to the Mediterranean.

2. Chinese interest in the purchase of Israeli insurance companies or in being contributors in them.

3. Beijing’s aspiration to win tenders for the construction and operation of the two private ports in Ashdod and Haifa and a twenty-year concession to operate the latter.

4. China’s contribution to the construction of tunnels, and the extension of pipelines to transfer natural gas out of Israel.

5. In 2021, the EuroAsia Interconnector project, which is a subsea cable system connecting the electricity grids of Israel, Cyprus, and Greece with the European transmission network, will be finished, making Israel a pure source of electricity to Europe. In addition, Israel produces in its sunny southern part 200 Mega Watt of renewable energy, and by 2021 the EuroAsia Interconnector project is supposed to contribute significantly to the clean energy from Israel to Europe, and China is working on connecting the EuroAsia Interconnector project to the BRI.

It must be noted that there are Israeli factors that attract BRI as follows:

1. The unique geographical position on the Mediterranean Sea as a central point between the three continents.

2. Israel is ranked the second lowest investment risk on the Economist Intelligence Unit BRI risk index, out of 63 countries, making the investment in the Israeli market highly attractive for China. [3]

3. Israel is an important gateway to China to access Western technology, especially in light of the intensified US blockade of this aspect of its relation with China. China considers this Israeli aspect important, since there are many partnerships between Israeli companies and American ones in particular and European ones in general.

4. The discoveries of potential energy sources on the shores of the Mediterranean have increased, making Chinese options to access energy sources expand, especially when the indicators of economic convergence between Israel, Greece and Cyprus are increasing.

5. The growing Arab openness to Israel has made China pay attention to the new trade corridors between the Arab countries and Israel.

The Israeli Predicament in its Relationship with the BRI

There is a heated debate in Israel about the prospects of the Chinese-Israeli relationship, in which the BRI would be the backbone for the next thirty years. Here we find three trends in the Israeli strategic thinking:

First Trend:

This trend prevails among the Israeli military and security circles, and believes that China is “employing soft power tactics aimed to make it a new imperialist power that aims to control South East Asia, East Africa and the Middle East, while its next targets are the relatively weak economies of Europe.”[4] This trend warns against the deceptive image of China’s “soft” policy at this stage, and it even compares between what appears to be a positive image of China today and the contrast between the very positive image of the US in the world before World War I and before it became greatly involved in international wars and how things ended up at a later stage, where now the US is at the top of the world’s most hated countries.

Since this trend reflects the Israeli perspective of international relations; where security is one of its main features, it warns against going too far along the Chinese project. The fears of this trend are manifested in some features:

1. In light of the strained US-China relations, there are concerns over the negative impact of the growing Chinese-Israeli relations on the US-Israeli relations. Since this trend views that the US-Chinese trade competition would particularly increase, it considers that deepening the relationship with China may threaten the US-Israeli relationship, and would make Israel the back door for China to ease US sanctions on it. There are precedents in this area, for when in 1999 the US forced Israel to cancel a deal with China, through which China was seeking to obtain from Israel an advanced airborne radar system on surveillance planes.

2. There are US concerns that the Chinese-Israeli relationship may be a gateway for China to access sensitive US technology, especially in military, security, and computer fields, etc, which could threaten the US-Israeli relations.

3. This trend considers the Chinese presence in Haifa, and facilitating their operation there, could be a Chinese hotspot for gathering information about the US Sixth Fleet stationed there, a matter considered by Washington to be of the utmost gravity.

This trend warns of China’s penetration into the Israeli economy domestically or in some academic institutions, citing the Tnuva deal. In this deal, China acquired 56% of the shares of the Israeli dairy company Tnuva worth $ 2.5 billion, knowing that the company’s share of Israel’s dairy market exceeds 70%. The deal faced fierce resistance in the Israeli Knesset, which saw great risks in it, in case it spread. There are reports that the Israeli government is considering establishing a CFIUS [Committee on Foreign Investment in the United States]-like mechanism to assess risks to Israeli interests from foreign investors with a focus on Chinese entities. [5]

This trend also reinforces its view by raising China’s position on Arab issues, especially the Palestinian one. This means that the development of the Chinese-Israeli relations has not affected China’s “political positions” on political issues that interest Israel. It cites the following indicators: [6]

1. China’s stated position on Palestinian rights, which is closer to the Palestinian side than the Israeli one.

2. China’s voting pattern at the United Nations remains unchanged, since the establishment of diplomatic relations between Israel and China in 1992, and after the opening of the second consulate of Israel in China.

3. China’s weak attention to Israeli concerns over China selling arms to Arab countries and Iran.

4. China continues to support the Iranian nuclear agreement, not to mention that the degree of its compliance with the sanctions on Iran remains below Israeli approval.

5. The Organization of Islamic Cooperation countries oppose the accession of Israel to the Asian Development Bank, in which China is a major force. They also oppose providing support to Israeli institutions seeking opportunities from this bank.

Second Trend:

This trend seems to be more inclined toward developing the relationship with China, by referring to the following manifestations: [7]

1. The Chinese-Israeli relationship, especially in the commercial sphere, is steadily and rapidly growing, where during 2012 to 2015, Chinese investments in Israel saw an increase of 100% each year. By the end of 2018, trade reached $ 14 billion, and may make even greater leaps once Israeli participation in the Chinese project is enhanced.

2. It is noted that the increasing Chinese investment in Israel is associated with a general trend of declining foreign investment in Israel. This means that China’s investments offset the decline (albeit non-linearly) of investment in Israel. China is even involved in 50% of foreign investment projects in Israel. It should be noted that Israeli planning indicates that over the next 30 years, Israel needs an investment of over $200 billion, and this reinforces relations with China.

3. In 2017, Chinese tourists to Israel exceeded 100 thousand, hence a significant increase in these numbers is expected after the completion of the BRI facilities.

4. With the growing Arab inaction towards the Palestine issue, and the increased Arab openness towards Israel, it is necessary to make Israel a transit point from the Levant to Europe. This requires the development of the Israeli infrastructure and connecting it to the branches of the Chinese project in the Arab countries. As Arab normalization with Israel is expanding, China’s political positions towards the Arab issues would become on one hand less important, and on the other it would become less adhering to its traditional positions on these issues.

5. In the Chinese government investment index, Israel is rated 22 out of 63 countries located along the BRI, and the Chinese companies are investing in various sectors in Israel, for example, in the fields of food technology, agriculture and infrastructure, especially in Israeli companies such as: Tnuva, Makhteshim Agan, Shahal, and Nextec, etc. In this regard also, Israeli-Chinese cooperation in the field of water is highlighted, as it seeks to develop the Islamic Western provinces (Xinjiang), which are the home to the Uighurs Muslims, and China is seeking to have stability there. It has already witnessed some armed opposition by Islamic organizations targeting Chinese government facilities. Consequently, one can conclude that military technology between Israel and China remains marginal compared to other sectors, which the US does not object to within acceptable limits.

6. In addition to the fact that Israel has joined the Asian Infrastructure Investment Bank (AIIB), it has formed the Joint China-Israel Bilateral Task Force on Economic Relations headed by Eugene Kandel, which seeks to develop the Israeli role in the project linking the Indian Ocean and the Mediterranean across the Gulf of Suez on the one hand, and on the other hand, it monitors the investment sectors between the two parties.

Third Trend:

This trend takes a middle position on Chinese-Israeli relations, trying to reconcile between the security and economic pragmatic perspectives as follows:

1. The Israeli-Chinese cooperation in the field of civilian technology would continue, with extreme caution in military-technological relations. That is moving away from the technology that provokes the US, and focus on other sectors such as new energy sources, agriculture, development of transport technologies, life sciences, etc.

2. Developing trade relations and mutual investment, without letting the Chinese reach deeply in sensitive sectors or to the extent that threatens strategic sectors in Israel.

This trend calls on Israel to abandon the caution policy in dealing with the Chinese project, engage in it, strengthen Israeli relations with China, and allow Beijing to become more involved in the Palestinian-Israeli and Gulf-Iranian conflicts.

Conclusion

It can be said that the Israeli-Chinese relationship in general and the status of Israel particularly in the BRI, depends on two important factors:

1. The US restrictions on Israel in its relations with China.

2. The extent at which the Arabs marginalize their interests with China, at the time when China wants to trade-off between its relation with the Arabs and those with Tel Aviv. If the Arabs use their interests with China to restrict the freedom of Israel in developing its relations with China, then Israel’s stature in China’s strategic project will falter, and vice versa.