Israel faces US pressure amid concerns over China’s involvement in key infrastructure projects

By Arie Egozi

Growing concern in Israel over China's deep penetration into major Israeli infrastructure projects, with the U.S. exerting heavy pressure on Israel to limit further involvement of Chinese companies in such ventures.

 

According to the Israeli daily Calcalist, a letter was recently sent to Yuli Edelstein, chairman of the Israeli parliament’s Foreign Affairs and Defence Committee. The letter demands an urgent discussion about China’s stakes in Israeli infrastructure projects. The main focus is on the Haifa Port dock, managed and operated by a Chinese company, along with other Chinese holdings.

“Despite warnings from the security establishment, in the last decade, the Chinese government has invested extensively in strategic assets in Israel,” writes Dr. Harel Menashri in the letter. Menashri, a founder of the cyber unit at the Shin Bet and current head of the Cyber Faculty at HIT, Holon Institute of Technology, expresses concerns that began before October 7 and have since intensified. He warns that China, which is radicalizing its positions towards Israel, could potentially disrupt critical Israeli infrastructures.

 

 

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Recent developments revealing China’s intent to enhance military cooperation with Iran have significantly heightened Israel’s concerns about Chinese involvement in major infrastructure projects.

This issue isn’t new. Years ago, the U.S. warned Israel about Chinese companies seeking to acquire advanced Israeli defence technologies. While details remain classified, sources indicate that some attempts were uncovered and thwarted.

One such attempt led to an investigation and warning to a group of Israeli experts, who were ordered to halt unauthorized transfers of defence technology to China. Israeli security organizations have recently foiled similar attempts.

Israeli defence companies are under strict orders to avoid any contact with China on security or defence matters. However, the Shin Bet, Israel’s internal security service, discovered some years ago that Israelis had established contacts with China.

In recent years, Chinese companies have been involved in major infrastructure projects in Israel, causing U.S. unease over Chinese access to critical systems. In some cases, the Israeli government reversed decisions, opting not to hire Chinese companies for significant projects.

 

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Chinese efforts to penetrate Israeli systems through cyber-attacks have mostly been foiled by Israeli Cyber Defence units. Nonetheless, sources indicate that China operates “straw” companies aiming to establish seemingly legitimate cooperation with Israeli firms to access defence technologies.

The Israeli internal security service has intensified efforts to uncover such attempts. The security department of the Israeli Ministry of Defence has issued guidelines to detect attempts at exploiting Israeli-developed defence technologies by China.

The Israeli ban on exporting defence technologies to China has been in place since 2000. Under intense American pressure, Israel had to cancel the sale of the Phalcon Airborne Early Warning System to China. The cancellation of this advanced contract with state-owned Israel Aerospace Industries resulted in a USD 350 million compensation payment to China.

 

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