Israel's trade with China doesn't weaken its alliance with the US


China's President Xi Jinping and Israel's Prime Minister Benjamin Netanyahu. Photo: AFP
China’s President Xi Jinping and Israel’s Prime Minister Benjamin Netanyahu. Photo: AFP
[I had the honor to co-author the essay below with the distinguished US Attorney and Republican Party leader Marc Zell. We respond to Arthur Herman’s allegations on the Mosaic Magazine website that trade and investment from China put Israel’s alliance with the US at risk. On the contrary: Israel’s alliance with the US has never been better. Crossposted from Asia Times.

Israel’s improved ties with China don’t diminish its US alliance

A prejudiced double standard has been applied to Israel’s prudent cooperation with China

Israel often is called America’s best ally. After the first two years of the Trump Administration no-one can doubt it. Among all of America’s allies, Israel has aligned itself unambiguously and without deviation with Washington’s objectives, while our European and Japanese allies have complained, temporized, and occasionally dealt with China and Russia behind America’s back. The President’s unflinching support for the Jewish State, including the historic move of our Israel embassy to Jerusalem, is reason enough for Israel to cleave to its American alliance.

But there is also a deep confluence of strategic interests at work. There is only one country in the Middle East with the expressed intent and prospective ability to destroy Israel, and that is Iran. China is a major vendor of weapons as well as weapons technology to Iran, especially the know-how to make missiles that can reach Israel and eventually carry nuclear warheads. China also is Iran’s largest trading partner, and its most important provider of industrial goods and hydrocarbon investments. This is a consideration far more pressing than any economic benefits that Israel obtains from trade and investment with China.

American pressure with Israeli backing may be having an impact. Reuters reported October 23, “The Bank of Kunlun Co, the key Chinese conduit for transactions with Iran, is set to halt handling payments from the Islamic Republic under pressure of imminent US sanctions against the country.” China also has cut back its purchases of Iranian oil. That appears to be a small victory for the Trump’s administration muscular diplomacy, and one of great benefit to Israel.

With this background, we read with concern Arthur Herman’s November essay for the Jewish website Mosaic, which implied that Israel’s trade and investment links with China risks undermining its alliance with the United States. Herman doesn’t say this in so many words, but his essay is full of the dog-whistles used by so-called foreign policy “realists” to question Israel’s loyalty to the United States.

Israel provides no military technology to China and sells it no weapons, Herman concedes, and its trade and investment relationship with China centers on water management and environmental technology, fields in which Israel is an acknowledged leader and China a major consumer. But Herman rehashes two-decade-old disputes between Israel and China over the sale of Israeli military technology – the Phalcon airborne reader and the Harpy drone.

In the early 2000’s, Israel sold home-developed technology to China but stopped doing so when America asked it to. Since then Israel has punctiliously avoided the sale of any military technology to China, as Herman admits.

Herman’s account is full of sinister insinuation. He writes for example:

“Israel has been careful to abide by the agreement with Washington not to sell defense equipment to China. That agreement, however, does not prevent the Israeli military from buying equipment from China. Reportedly, both the IDF and the Israeli police have purchased Chinese-made drones that take part in non-classified operations by Israeli ground forces; the IDF has reportedly sought as well to acquire 200 additional drones and spare parts pending completion of a project to develop an Israel-made drone with similar capabilities.”

Herman refers to an August 6, 2017 report in the Times of Israel that the IDF has acquired small drones from a Chinese manufacturer similar to those that can be purchased by civilians in any electronics store, to be “used for routine missions, not for penetrating deep behind enemy lines for high-level intelligence gathering. In addition, the army noted that the unencrypted, vulnerable Mavic and Matrice are only a stopgap solution,” to be replaced by secure equipment from non-Chinese sources.

This is the sort of baseless, backhanded slur against Israel we would expect to hear from Professors John Mearsheimer and Stephen Walt. It is disappointing to read this sort of thing featured as the “monthly essay” in Mosaic, a Jewish website.

As Herman observes, Prime Minister Netanyahu visited Beijing in March 2017, to discuss joint efforts in “air-pollution control, waste management, environmental monitoring, water conservation and purification, as well as high-tech fields.” In fact, Israel’s trade with China and China’s investment in Israel stems from Israel’s expertise in environmental, water management and medical technology. Israel leads the world in these fields, and China has pressing requirements. The purely civilian requirements of China’s 1.4 billion people are more than enough to occupy the entrepreneurs of a country one-half of one percent the size of China.

But Herman questions “whether and how the relationship with China could become a dependency. Such a change might please Beijing, but it would impose on Israeli national security a new kind of vulnerability, one very different from the challenges it has faced successfully in the past.”

He doesn’t mention that Israel exported $17 billion of goods to the United States in 2017, or more than 28% of its total exports, compared to $3.3 billion to China. Israel also exported $1.9 billion to India, China’s main rival in Asia, including high-tech military equipment. Israel’s exports to China last year accounted for just 5.5% of the total.

It is prejudicial to suggest that trade “dependency” with China could become an issue in the foreseeable future. Herman notes that “annual trade between the two countries has now surpassed $11 billion, a small figure when compared with China’s trade with the United States or Europe” – or with Israel’s trade with the United States or Europe. “But [Israel’s China trade is] fully 200 times larger than it was at the establishment of diplomatic relations in 1992.” That is an abuse of arithmetic; 200 times next to nothing is still not very much.

Herman adds that “Netanyahu also expressed interest in Israel’s joining China’s massive multi-billion-dollar One Belt One Road project, and in signing a free-trade agreement between the two countries.”

From this harmless observation, Herman leaps to the assertion that “For Israel… Beijing has very special plans. It sees the Jewish state as an important link in the even larger China-dominated trading chain mentioned earlier: the One Belt One Road Initiative (OBOR) extending from the Indian Ocean and central Asia across the Middle East and thence to Europe. Xi hopes that OBOR will generate $2.5 trillion in trade for China over the next decade, with Ashdod serving as a crucial port of destination for seaborne trade with Europe.”

Israel’s proposed rail link between the Red Sea and the Mediterranean well may carry Chinese freight, but to assert that it will be a “crucial port of destination” is a gross exaggeration. China also is building a second Suez Canal in Egypt as well as rail links to Turkey, with vastly greater freight capacity than the Israeli link.

These are a few examples of the sinister slant that Herman places on normal economic relations. One wonders what compels him to insinuate a malicious agenda into seemingly innocent business activity – until the last sentence of the article, when Herman tips his hand. He concludes:

“Will free, democratic Israel, with all of its savvy and its redoubtable instinct for self-reliance, be able to resist the temptation of becoming part of China’s imperial orbit? If not, what hope does the rest of the West have, and where, not only in the Middle East but around the world, will the future of liberty and democracy find shelter?”

It is unclear what Herman wants Israel to do for the “future of liberty and democracy.” Should it hold its private sector to a stricter standard than General Motors, McDonald’s, Starbucks or Intel, which have extensive operations in China? Should it eschew diplomatic relations with authoritarian regimes in the Middle East such as the Gulf monarchies who are also American allies? Given Israel’s constraints, isn’t it enough that Israel provides an example of democracy unique to a region with an otherwise tragic political history?

David P Goldman has written the “Spengler” column for Asia Times since 2001. Marc Zell is an international attorney and serves as Vice President of Republicans Overseas (International).



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