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U.S. Concerned About Chinese Investments in Israel

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Mulroy noted that within three years, a Chinese state-owned company is expected to operate part of the Haifa port, a frequent port of call for the U.S. Navy’s Sixth Fleet and which is near an Israeli naval base where nuclear submarines are reportedly stationed. China’s investment in the port prompted a rare objection from the U.S. Navy to Israeli counterparts when it was first disclosed last year. As Amos Harel, a correspondent for the Israeli newspaper Haaretz, noted in the paper, “China is acquiring vast influence over essential infrastructures in Israel and, indirectly, also a closer look at some of Israel’s military capabilities.”

“The Department of Defense is concerned about China’s desire to erode U.S. military advantages, as well as China’s push for access and basing, use of economics to intimidate through the One Belt One Road initiative”—a worldwide campaign of infrastructure investments—”and technology and intellectual property theft, acquisition and penetration,” Mulroy’s statement said. (The Israeli embassy did not immediately respond to a request for comment.)

Why worry? As Undersecretary of Defense for Policy John Rood put it on a recent visit to Israel: “China wants to own the road, and wants to control the belt.”

But U.S. defense officials’ concern is not just about China’s physical access to a sensitive region where the U.S. has for decades been the dominant outside power. It’s also that certain commercial deals, particularly in the technology sector, could be a backdoor to Chinese spying in sensitive national-security realms. “The openness of the U.S. and Israeli economies is a strength for our countries, but malign actors can take advantage of that if we are not cautious,” Mulroy said.

The U.S. has raised similar issues, including with the British, whom President Donald Trump is prodding not to partner with the Chinese company Huawei to build next-generation telecommunications networks known as 5G. (The U.S., meanwhile, has taken its own measures against the company, sharply restricting its sales in the U.S. while citing fears for national security.) One problem with that, from the U.S. perspective: America and Britain are very close intelligence partners, and the U.S. doesn’t want to effectively be sharing intelligence with the Chinese. The intelligence-sharing issue is also a sensitive one in Israel’s case. The allies coordinate closely on a range of regional security issues, including the ongoing counter-ISIS fight in Syria and trying to contain Iran’s activities in the region. China, however, also maintains close ties to Iran.

And elsewhere in the Middle East. It is perhaps to China’s advantage that it has adopted an agnostic posture on some of the major disputes roiling the region, especially the enmity between Iran and Israel as well as many Gulf countries as well. Where there are U.S. interests in the region, these days there are also often Chinese investments. China has launched major industrial investments in the United Arab Emirates, another wealthy ally of the United States, which has backed the U.S. pressure campaign against Iran and which defense officials characterize as its most capable military partner in the Gulf. Beijing has invested in energy projects and railroads in Egypt and ports and car plants in Tunisia. It’s also getting involved in Syrian reconstruction and in the Iraqi oil sector.

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