Article Library / 2015

2014-2015 Annual Assessment

The 2012-2013 Assessment noted that the “Arab Spring” had created great unease in China. In the light of the regional turmoil, Israel appeared to be an island of stability and prosperity, as well as a source of valuable information. Frequent meetings between senior military officials and Middle East experts of both sides were a consequence of this new perception. In 2012, China and Israel signed a memorandum of understanding promising China’s support for a high-speed rail link between the Mediterranean and Eilat at the Red Sea. For China, building an alternative to the Suez Canal to cope with overload and other problems was a “strategic decision,” according to the Communist Party’s People’s Daily.2 The offer did not come too soon. In 2013, Al Qaeda affiliates fired rocket-propelled grenades at a Chinese cargo ship crossing the canal.

In May 2013, Israel’s Prime Minister Netanyahu was welcomed in China on an official visit, the first by an Israeli prime minister in six years. The discussions between the leaders went very well and were almost entirely devoted to bilateral relations. (During Prime Minister Nethanyahu’s visit, the President of the Palestinian authority Abu Mazen also visited China. The two leaders did not meet and their visits had no perceptible impact on China’s relations with either side). Early in 2013 it was not yet clear whether these events reflected a coherent long-term Chinese strategy to strengthen links with Israel. Now it appears that there is such a strategy. Netanyahu’s visit was followed by those of several Israeli cabinet ministers and, in April 2014, by a state visit of Israel’s President Shimon Peres, the first state visit by an Israeli president since 2003.

China’s stake in Israel’s economy is rapidly growing. Between 2011 and 2014, China acquired 7 billion dollars in Israeli assets. It expanded its strategic presence in Israel through investments in high-tech and other, more traditional industries. China also invested in Israeli infrastructure projects and increased its importation of Israeli water and other technologies. The number of joint high-tech projects between the two countries is second only to those between Israel and the United States. Among industrial investments, widely commented on and sometimes criticized, was China’s Bright Food’s plan to acquire 70 percent of Tnuva, which controls 70 percent of Israel’s dairy market. (However, early in 2015, Bright Food asked for a delay to sort out unexpected financial difficulties.)

Infrastructure investments have not lagged behind. Israel published tenders for the construction of two private ports to augment the existing ones in Haifa and Ashdod. Late in 2014, the China Harbor Engineering Company won both tenders. Due to Israel’s legal restrictions the Chinese had to choose between the two and opted for Ashdod. China Harbor is government-owned – hence its decision was largely political. Missiles from Gaza had, a few weeks earlier, partly paralyzed the Ashdod port. China’s reported interest in Israel’s Mediterranean gas resources must be seen in the same context. Evidently, China trusts Israel’s future staying power, defense capabilities, and continuing prosperity. Also, trade between the two countries reached almost 9 billion dollars in 2014, climbing faster than Israel’s 43 billion dollar trade with the EU. Israel hopes to double its current trade with China in the next few years.3

Last but not least, at the 12th National People’s Congress March 2015 session, Prime Minister LI Keqiang delivered his government’s work plan for 2015. Israel is mentioned there for the first time. The Chinese government informed the Congress that it would begin negotiations toward free-trade agreements (FTAs) with, among others, the Gulf Cooperation Council (the Arab oil producers) and Israel. No other country in the wider Middle East, Africa, Europe or America is included.

China’s decision to improve relations with Israel also extended into academic and public relations circles. Chinese foundations and universities have established agreements with Israeli universities (Technion in 2013, Tel Aviv University in 2014) involving Chinese donations of hundreds of millions of dollars. In 2014, two books of outspoken Zionist, pro-Israel advocacy appeared in Chinese translation for a large Chinese public: Ambassador Dore Gold’s 2007 The Fight for Jerusalem,4 which justifies Israel’s unification of Jerusalem, and JPPI’s 2004 China and the Jewish People – Old Civilizations in a New Era,5 which argues for closer bonds between China, Israel, and the Jewish people. This is the first time since the establishment of the People’s Republic of China in 1949 that the Chinese public is free to read such openly “Zionist” books. In addition, the Israeli NGO SIGNAL (Sino-Israel Global Network and Academic Leadership) maintained an ongoing presence in Chinese universities, with the support of China’s Ministry of Education (2013). By 2014, SIGNAL successfully advocated for the inclusion of Israel studies in ten Chinese universities.

No single reason can explain China’s Middle East policies, particularly its Israel policies. There is a complex mix of interrelated economic, geopolitical, and military factors. Economics remains the primary driving force. In 2013, China became the world’s largest trading power, thus returning to a position it had held for centuries until the 1880s. In October 2014, according to the International Monetary Fund, China’s GDP based on purchasing power parity (PPP) overtook that of the United States.6 The Chinese are acutely aware of their success. As they reached their current position earlier than they had expected, they are not quite sure of the rights and responsibilities that come with it. In any event, there are few international issues in which China is not involved and influential. For such reasons alone, China will be increasingly drawn into Middle Eastern affairs. In addition, China seeks to revive the “Silk Roads” that since antiquity connected its mainland with markets in the West and the South, including maritime routes. China’s Silk Road policy will cost 40 billion dollars in the short term, and many billions more in the medium and long terms. China will build roads, bridges, railways, harbors and more on three continents. The aim is to boost China’s international trade but also to ensure global stability. Israel, which sits on one of the crossroads leading from East Asia to the West, is in a choice position. Few Israelis have seemed to grasp the geopolitical and public image advantages the Silk Road development could confer on Israel.7

Worsening turmoil in the Middle East is another important factor shaping Chinese policies relevant to Israel because it could threaten the flow of China’s indispensable oil imports. The Chinese watched the revolutions in Tunisia and Egypt, the collapse of Libya, Iraq, Syria, and Yemen, the appearance of ISIS and, as they see it, a concomitant decline of American power – willpower more than real military power – in the Middle East and beyond. Until 2011 or 2012, China was confident that the United States would continue working to ensure stability in the Middle East, and at least guarantee, at no cost to China, the safety of the sea lanes from the oil-rich Persian Gulf to Asia. However, in 2013 it became clear to the Chinese that their “free ride” was over. Some Chinese experts cite American incompetence, but others are falling back on hackneyed conspiracy theories. Did America, which no longer requires Middle Eastern oil, create all this turmoil just to wreck an oil-hungry China? Such suspicions come easily to a country already upset over America’s “pivot to Asia” policy.

For the Chinese, this is bad news. They are still trying to find their way through the Middle Eastern morass, exploring how to protect the sea-lanes and coping with conflicting policy objectives. On one hand, the Chinese see a stable Israel in a troubled Middle East as a strategic plus. On the other, they want to improve their credibility in Tehran and have decided to upgrade their naval ties with Iran. In September 2014, the Chinese and Iranian navies conducted joint war games in the Strait of Hormuz, which controls the oil flow to Asia. And one month later, China’s minister of defense was in Iran to discuss further naval cooperation. But China cannot ignore Saudi and Israeli concerns about Iran. China has sold Saudi Arabia up-to-date middle range missiles that could be used against Iran. And Israel got soothing words. During President Shimon Peres’s visit to China in April 2014, China’s President Xi Jinping publicly told him that China “fully understands” Israel’s security concerns with regard to Iran and would continue to support international negotiations to prevent Iran from developing nuclear weapons.

Power vacuums never last long in the Middle East. The United States may again choose or be compelled to increase its military profile in the Middle East after the 2016 presidential elections. If not, a growing Chinese military presence in the region cannot be excluded. China lost 20 (other sources say 70) billion investment dollars in the 2011 collapse of Libya, and 7 billion in Syria so far. After the emergency evacuation of tens of thousands of stranded Chinese workers from Libya in 2011, Chinese bloggers called for Chinese military bases in the Middle East. Ignored by the wider world, there are already more than 1,000 Chinese soldiers – 350 of them UN peacekeepers – in South Sudan protecting China’s oil investments. How such developments will affect China’s friendly attitude toward Israel, or Israel’s military options in the Middle East, is still unpredictable.

Muslim terrorism inside China is a third reason that helps to concentrate Chinese attention on the Middle East and affects policies toward Israel. It is growing and includes suicide attacks. This is particularly acute in the far-west Xinjiang province with its large Muslim population of Turkic-speaking Uyghurs. Uyghur nationalism and terrorism have not been created by external Muslim forces, but are greatly fuelled by them. In July 2014, ISIS named China the first of 20 battleground countries for the allegedly approaching global jihad. Approximately 100 Uyghur terrorists have joined ISIS in Syria. They are said to have travelled through Erdogan’s sympathetic and protective Turkey – a revelation that may puncture China’s earlier interest in better links with Ankara.

China fears the “Middle-Easternization” of its Muslims. This is why Chinese media reports on the 2014 Gaza hostilities were cautious and low-key. But it may be too late. Heated debates about the Palestinian-Israeli conflict frequently occupy the Chinese Internet. Chinese Muslims are hostile to Israel. Among the majority Han Chinese, many support Israel and equate Hamas with the Uyghur terrorists. Many others are neutral, more in line with Chinese foreign policy. China does not like to see its people emotionally polarized over a remote foreign conflict, but terrorism has drawn it nearer to Israel. The Chinese leadership has high regard for Israel’s expertise in fighting terrorism and wants China to learn from it. At the same time, however, China cannot ignore the feelings of many Chinese Muslims, although they probably constitute no more than four percent of its total population. In any event, it is highly unlikely that China will change its automatic anti-Israel UN voting record anytime soon. This is less linked to Muslim feelings inside China than to China’s perceived need for the support of the 56 Muslim member states, including several of its neighbors. China is also reluctant to break its 60-year-old voting record because it might be perceived as standing with the United States, Israel’s main supporter.

Improvements in Sino-Israeli relations over the last few years are not solely the result of Chinese policy changes. A few Israeli leaders and diplomats have been assiduously working toward this goal for a decade or more.
The American Jewish community, since 2011, has played no visible, important political role in these improvements, in contrast to the period before 2000 when China was more interested in forging links with this community. Long-standing tensions between the United States and China, and human rights issues, sometimes cause American Jews to feel uncomfortable in seeking links and friendly relations with China. However, this has not impeded growing commercial links between American Jews and China. American Jews, like other concerned Jews, should note that the international BDS movement, which threatens Israel in the West, has no place in China.

China strongly opposes boycotts against any country and would undoubtedly suppress any BDS initiative on its territory. Thus, China’s rise and its growing relations with Israel limit the global reach of BDS. Moreover, a growing number of Chinese are aware – for the first time in history – that Judaism is a long-living civilization which has contributed to the progress of the human race. All Chinese pupils learn that Karl Marx, who founded communism, was a German Jew, and many know that Einstein, arguably the most admired personality in China, was a Jew as well. While the number of Jews outside Israel is at best stable if not shrinking, and Jews from 1939 to today have disappeared from one country after another, the intellectual “presence” of Judaism in China, a quarter of mankind, has kept growing. For the long-term global impact of the Jewish people, this cannot be irrelevant.

American and other Jewish philanthropy was and is indispensable for Israel and the Jewish people’s cultural and academic outreach to China. This is the most lasting contribution that American and other Jews are making to the link between China, Israel, and the Jewish people. Yet a lot more has to be done. The current outreach to China is still too small, and for many Chinese, Judaism and Israel remain blank slates.

There are four problems that could delay or damage growing relations between China and Israel. All four could be addressed by appropriate policies:

  • China’s possibly growing involvement in Middle East diplomacy, particularly if China follows up on its stated desire to join the “Quartet” (U.S., Russia, EU, UN). It is true that China has little genuine interest in the Palestinian issue compared, for example, to Europe, but the international repercussions of Palestinian-Israeli violence could compel China to become more engaged. Not much good will come to Israel from China’s joining the Quartet. There is no chance that China will follow the United States and sympathize with Israel’s concerns more than the other three partners. It is, therefore, essential for Israel to discuss with China different, more innovative peace supporting and stabilizing roles in the Middle East. For example, a large Chinese investment program jointly for Israel and the Palestinian territories to build housing, roads and other infrastructure elements could have major effects, beyond economics.
  • United States opposition: In 2004, Israel signed a protocol with the United States that prevents Israel from selling China dual-use technologies and technologies that share American and Israeli inputs. As the United States and Israel interpret this text differently, difficulties have arisen that risk exacerbating tensions between the two countries in regard to China. Israel’s desire to strengthen links with China – a desire that dates back to the 1950s – cannot always be reconciled with the often adversarial relations between the United States and China.
  • Disappointment in business circles that could dampen the current optimistic business atmosphere: Some of the recent cooperation agreements between Chinese and Israeli businessmen could end in failure and disillusionment. There are huge cultural differences between China and Israel, which should be better understood. Israel has no high-level, strategic approach to China that integrates politics, economics and culture. Such an approach might be valuable in increasing Israeli understanding of China’s culture and its market.
  • Populist and environmentalist backlashes: When China purchased a stake in Tnuva, as noted before, Israeli dairy farmers protested: “Israelis want Israeli milk.” Environmentalist opposition has delayed the planning of the “Med-Red” high-speed railway link. It is hardly uncommon for countries to experience populist and environmentalist backlashes against foreign investments. However, major Chinese investments in Israel make China a potential partner in Israel’s long-term survival and prosperity. A public relations effort might help the Israeli people understand that Chinese investments, which some fear, could benefit Israel geopolitically.
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