The Port of Haifa, Israel’s largest seaport, will inaugurate a Chinese-constructed and operated terminal in 2021, leading to security concerns being raised by the United States due to the port’s proximity to its naval vessels.
The new terminal is being built by the state-owned Shanghai International Port Group (SIPG), which operates the world’s busiest container port, the port of Shanghai. It will be less than a mile away from an Israeli naval base where the U.S. Navy’s Sixth Fleet makes port calls.
Under the $2 billion contact, SIPG will not only build the terminal but also operate it for 25 years after it is functional. Last year, The Jerusalem Post reported that the U.S. may stop docking at Haifa after China takes over operations in 2021.
The port deal is just one facet of a growing economic and military relationship between China and Israel. China is Israel’s third-largest trade partner. And its investments in the Middle Eastern country totalled $4.1 billion as of last year. Besides Haifa Port, Chinese state-owned companies are also developing Israel’s Ashdod Port, which is near an Israeli naval base, and the Tel Aviv light rail system, which runs near Israel’s defense headquarters in Kirya. Chinese firms also major investors in Israeli technology startups.
Both countries have maintained close strategic, economic, military, and technological links since they established diplomatic relations in 1992.
Israel also provides China with military assistance, expertise and technology, ranking “second only to Russia as a weapons system provider to China,” the United States-China Economic and Security Review Commission stated in 2004.
The U.S. Raises Security Concerns Related To Chinese Investment
The 2019 National Defense Authorization Act passed by the Senate included a reference to Haifa Port and urged the Israeli government to consider the security implications of foreign investment in their country. “The United States has an interest in the future forward presence of the United States naval vessels at the Port of Haifa in Israel but has serious security concerns with respect to the leasing arrangements of the Port of Haifa,” the NDAA read.
Israel has in the past faced repercussions by the U.S. for its dealings with China. In 2005, the U.S. suspended Israel from an aircraft and development and acquisition program to deter it from exporting the Harpy Killer drone to China.
In March, U.S. President Donald Trump reportedly warned Israeli Prime Minister Benjamin Netanyahu that the security relationship between both their countries could suffer if ties between Israel and China are not curbed. And in June, the U.S. Deputy Secretary of Energy Dan Brouillette asked Israel to take caution when it comes to Chinese investments into their critical infrastructure, claiming that the motives underlying China’s investments “are not pure.”
Israel finds itself in a difficult balancing act, pitted between China and the United States. In an off-the-record meeting this month in Beijing between Chinese Foreign Ministry officials and Israeli media outlets, the Chinese apparently made it clear that they would “view any Israeli withdrawal from the deal as not only a contract violation but also a personal insult.”
With the extent of the economic partnership between both the countries, it would also not be fruitful for Israel to pull back from Chinese investment in its country. China’s growing status as a world power and economic powerhouse means Israel benefits from maintaining close ties.