Home inFocus Testing U.S.-Israel Alliance: Chinese and Haifa’s Port

Testing U.S.-Israel Alliance: Chinese and Haifa’s Port

Yaakov Lappin Fall 2019
A view from Mount Carmel overlooking the port in Haifa, Israel. (Photo: Inna Felker)
A view from Mount Carmel overlooking the port in Haifa, Israel. (Photo: Inna Felker)

The presence of Chinese state-owned companies at two of Israel’s three key seaports—Haifa and Ashdod on the Mediterranean coast, but not Eilat on the Red Sea route to Asia—has been acting as a thorn in U.S.-Israeli relations.

According to China’s Ministry of Transport early this year, a total of 52 ports in 34 countries were managed or were constructed by Chinese companies, and that number was set to grow as Beijing expanded its program. Expansion included Haifa’s new private seaport, which the Shanghai International Port Group (SIPG) will begin to manage in 2021 for 25 years. Meanwhile, China’s Pan Mediterranean Engineering Company (PMEC) is building Ashdod’s private port and is due to complete the project in 2021.

The Israeli government views both new sites as alternatives to the older, state-owned ports in both cities. They have been prone to costly strikes, but will continue to operate.

In particular, the Haifa port project is drawing the concern of the U.S. Navy, which often docks at the Israeli naval base in the northern coastal city. That close cooperation could change if the nearby civilian port comes under Chinese management, American officials have warned.

With the issue continuing to stir controversy and debate in Israel, a number of commentators have expressed concern over the harm it might cause to Israeli-American naval cooperation.

“There is no doubt that this has reached a crucial junction,” Professor Uzi Rabi, director of the Moshe Dayan Center for Middle Eastern and African Studies at Tel Aviv University, told the Jewish News Service (JNS). “The American antagonism is clear to all, and Israel will – like on many aspects of the Middle East and in general – find a middle way that is very creative.”

Asked whether Israel can indeed find a path that would let it enjoy the economic benefits of relations with Beijing, Rabi said that Israel will have to “dedicate a lot of energy and creativity” in charting a future of reciprocal economic relations. Such relations would have to ensure that China does not “take control of central pillars of the local economy, or taint relations with the U.S.”

An early sign of pressure on Israel to keep China out of the loop of new infrastructure projects may have emerged when Israel reportedly restricted a tender for the construction of a major new international airport to NATO nations only.

“Security Risks Too Great”

Washington has made no secret of its displeasure over developments at Haifa. During his visit in mid-January, then-National Security Advisor John Bolton conveyed the Trump administration’s concern about China’s involvement at the port.

Dr. Ofer Israeli, a geostrategist and international-security policy expert, said that while the construction of the Ashdod port is nearly complete – meaning that the matter is closed – the situation at Haifa port is very different. “In Haifa, a Chinese company would operate the port for 25 years, and therefore, the possibility of withdrawing from the deal is possible and essential to Israel’s security,” said Israeli.

Israeli, who lectures at the Institute for Policy and Strategy at the Interdisciplinary Center (IDC) in Herzliya, argued that giving away the keys to a strategic port to any foreign party means a loss of Israeli control over a central gate to the outside world.

Israeli is also concerned by numerous reports of China taking advantage of the infrastructure it builds in other countries for surveillance, intelligence gathering or cyber warfare.

The proximity of the civilian port to the Israeli Navy base at Haifa could allow the Chinese to track Israeli naval activity, which is supposed to be classified, warned Israeli.

“In my view,” he said, “Israel will not be able to deal with the security risks – not just in terms of spying, but also on other matters, such as the Chinese desire to bring ships to the port that could be on their way to train or assist Syrian forces or Hezbollah.”

Washington will in all likelihood “force us to withdraw from the deal, and Israel will pay a higher price to the Chinese for every passing day, through the rising exit fines, and through the harm that would come to relations with China,” he cautioned.

The U.S. and China Compete

Roie Yellinek, a doctoral student in the department of Middle East Studies at Bar-Ilan University in Ramat Gan, published a paper at the Begin-Sadat Center for Strategic Studies, in which he placed the Haifa-port tension within the wider context of growing, global American-Chinese competition. Yellinek, a fellow at the China-Med Project, which monitors relations between Beijing and regional countries, wrote that “while the direct implications of the port’s management are of interest to China and the United States., their concerns are more related to a Cold War-type struggle.”

“Similar to the Soviet-American struggle during the Cold War, Washington and Beijing are competing over areas of control and patronage. The question of influence over Israel is very important to both countries,” said Yellinek. “From the American perspective, Israel is its oldest and most important ally in the Middle East, and one of the current administration’s closest friends. From Beijing’s perspective, the opportunity to increase its influence on a country that maintains such close ties with the U.S. can have deep implications for China’s international status.”

Yellinek said he believed that Israel could deal with the potential security challenges created by the Chinese company’s presence at Haifa. But the strain this issue would cause to relations with the United States would be too costly for Jerusalem to bear, he argued.

“My personal view is that we need to satisfy American expectations because they guarantee Israel’s security, while China has few sentiments for Israel’s security needs,” he said. “I think the government will have to act… Ultimately, China is closer to Iran than it is to Israel.”

Yellinek noted that China has quietly begun establishing soft power channels in Israel to promote its cause. He also noted that Chinese companies operate ports around the world, and that there is nothing inherently unusual about the Israeli case.

As the world’s second-largest economy after the United States, China has been rapidly expanding its global presence. Under President Xi Jinping, the country launched its ambitious Belt and Road Initiative, creating a lucrative network of land and sea trade hubs across Eurasia. It is a network that greatly expands China’s access to and influence on global trade.

In September 2018, Rear Adm. Oded Gour-Lavie (Res.), a former head of the Israeli Navy’s Strategic Task Force, said that given its location in the eastern Mediterranean, and coastline on the Red Sea, Israel is well-suited to benefit from China’s initiative. But in a situation in which economic interests clash with security interests, Israel will have to make future decisions differently, “so that we don’t shoot ourselves in the foot.”

From Yellinek’s perspective, the alliance with Washington is the most important factor to defend. “The Israeli government should tell the U.S. that yes, Washington is undoubtedly Israel’s best friend, but also that no American company offered to manage Haifa’s port,” said Yellinek. “And that this is aboveboard.”

Yaakov Lappin is a Research Associate at the Begin-Sadat Center for Strategic Studies in Ramat Gan, Israel. The Jewish News Service distributed a version of this story.