MESOPOTAMIA NEWS : RED CHINESE SILK ROAD TO JERUSALEM ? – 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.