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Iberdrola

Opinion

Israel, between the United States and China

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There are few countries in the world whose contemporary history has been as closely linked to that of the United States as Israel. Since its founding in 1948, Israel has been one of the United States' main allies in the Middle East and, in American eyes, the most important guarantor of US interests in the region.  

The relationship between the two states has grown closer as other historic American allies (the UK, France and the Shah's Iran) have lost their presence in the region since the end of the Second World War. Israel receives more than $3.5 billion annually from the US. This large amount of aid is part of the Qualitative Military Advantage strategy, through which the US is instrumental in ensuring that its military presence in the region is maintained. The US is instrumental in helping its ally maintain considerable military and technological superiority over regional rivals.  

But at the turn of the century, the seemingly solid American-Israeli friendship appears increasingly challenged. China is making inroads in Central Asia and the Middle East, and many in Washington watch with concern as the Asian giant appears to be meddling in its relationship with Israel.  

China, which is pursuing an ambitious and expansive foreign policy through its economic and financial might, sees the Southeast Mediterranean region as a key point in the macro-project launched in 2013, the Belt and Road Initiative (BRI), which aims to develop a transport and infrastructure network that would connect the European, Asian and African continents. But just as China has spent decades cultivating its influence over the Central Asian countries (Kazakhstan, Uzbekistan, Pakistan and others) that the BRI traverses on its way to Europe, the Middle East presents itself as a much more distant region, both geographically and culturally.  

Moreover, the Middle East is a region where many of the most important states, such as Israel, the United Arab Emirates and Saudi Arabia, enjoy good relations with the United States, which interprets China's rise as a threat to its global position. Thus, China is at a theoretical disadvantage vis-à-vis Washington and its allies in the Middle East in its quest to bring Europe closer to Asia.  

However, in the economic sphere China is carving out a role for itself as a key player in the future of the Middle East. And it is in Israel that China's growing investments have most alarmed Washington. Although China did not recognise the state of Israel until 1992, since then relations between the two have improved exponentially, spurred by the economic boom in both China and Israel over the past three decades. Chinese companies, many of them state-controlled, have played a major role in the development of infrastructure and transport networks in Israel. In September 2021, a new terminal was inaugurated in the port of Haifa in northern Israel, operated by the Chinese company SIPG, at a cost of around 1.5 billion euros.  

Ports such as Haifa, at the nexus between Europe, Asia and Africa, are of crucial importance to China's interests as they are the gateway to European and African markets which are key to the success of the BRI. Controlling the gateways to Europe and Africa is therefore a must for Beijing. Conversely, Washington is seeing how its biggest rival for global primacy is not only penetrating Europe, but also doing so through its Israeli ally.  

Chinese imports to Israel account for 13.4 per cent of total imports, about 16.7 per cent of American imports, according to Global Edge. Moreover, Chinese imports to Israel have been growing at a rapid pace, averaging 18% since 1995.  

More recently, China has diversified its foreign policy outside the economic and commercial sphere in order to be perceived positively by the Israeli population. For example, exchanges between academic institutions in the two countries are increasingly common, as is interest in their cultures. The two top universities in Israel host a Confucius Institute, the public entity that promotes Chinese language and culture abroad. Chinese foreign policy, moreover, is characterised by pragmatism and non-interference in internal affairs, which is why it has not attached great importance to Israeli policies towards Palestine, so as not to hinder its relations with Israel. All this contributes to China's increased soft power in Israel.  

Alarm bells have been ringing in Washington, accustomed to its "special relationship" with Israel, as described by John F. Kennedy himself. Even Donald Trump, whose administration has been one of the most pro-Israeli in recent history, raised his voice over China's growing presence in Israel. In 2020, US pressure led Israel to award a licence to build the world's largest desalination plant, Sorek-2, to an Israeli consortium rather than to a Chinese company, which seemed better positioned. 

Tensions between Israel and the US over China are not new. During the Bush presidency, Israeli arms sales to Beijing led to a brief crisis with Washington, which was resolved without too much trouble. However, the current situation is set against a backdrop of global competition between the US and China that increasingly resembles the Cold War, and tensions with Israel are seen not as a one-off episode but as part of the struggle for global primacy: the US is witnessing its hegemonic position slowly eroding in favour of China, even in the Americans' biggest ally, Israel.  

Israel will not give up its buoyant trade relations with China, but neither is it in its interests to anger Washington. It is therefore to be expected that the Israeli government will opt for a hedging strategy, protecting its special relationship with its American allies and also its interests with the very country that is challenging the US position. Ehud Olmert, Israel's prime minister from 2006 to 2009, wrote in the Jerusalem Post in September 2021 that China is not his country's enemy, considering pressures to cease cooperation with Beijing as "unjustified".  

Benyamin Netanyahu was used to performing balancing acts between the two giants, but it remains to be seen whether Israel's new prime minister Naftali Bennet can navigate the waters of an increasingly fragmented world. For the moment, US pressures on Israel continue, despite the change of administrations in the White House: CIA Director William Burns, close to Biden, has already mentioned to Bennet his concerns about Israel-China ties. However, tensions between Israel and the US are unlikely to lead to a real clash in the near future. President Biden is a staunch supporter of the alliance with Israel, and it is unlikely to be jeopardised with him in the White House. Israel, meanwhile, is likely to continue its strategy of hedging like a tightrope walker, firmly on the side of the US but not giving up on cultivating its friendship with China.   

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