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As Chinese-Israeli Relations Enjoy a Second Honeymoon, America Frets

The last time China and the Jewish state drew close, the United States drove them apart. Now there’s even more at stake.

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China’s Premier Li Keqiang toasts with Israel’s Prime Minister Benjamin Netanyahu during a signing ceremony at the Great Hall of the People on May 8, 2013, in Beijing. (Kim Kyung-Hoon-Pool/Getty Images)
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“Like it or not, when President Peres celebrates his 100th birthday in 10 years’ time, this [conference] will be half Asian,” the Chinese real-estate tycoon Ronnie Chan boldly declared at last week’s Presidents Conference in Jerusalem, as he sat alongside outgoing Bank of Israel Governor Stanley Fischer and former U.S. Treasury Secretary Larry Summers. “I guarantee you.”

With Chinese-Israeli relations enjoying a new honeymoon capped by Prime Minister Netanyahu’s recent state visit to Beijing, Chan is one of many observers now speculating that Israel’s future lies in the east. At the same time, China’s dependence on Arab and Iranian oil and the growing rhetoric from Beijing about the Israeli-Palestinian peace process are often depicted as the obstacles that could overshadow Sino-Israeli relations. “As the People’s Republic discovers the Jews,” warns a recent article in Foreign Policy, “it should remember an old Yiddish proverb: You can’t dance at two weddings at once.” But the reality is that Israel is less worried about the Arabs challenging its relationship with China than it is about the United States. Israeli officials at a recent meeting on China were concerned about how Jerusalem can strike a balance between Beijing and Washington. These officials remember that the previous era of close Sino-Israeli relations was brought to a sudden halt by American pressure.

Indeed, Israel has found itself forced to choose between China and the United States at several critical junctures in the recent history of both nations. Although Israel was the first Middle Eastern state to recognize China, the two newly independent states failed to establish official ties due to U.S. opposition at the outbreak of the Korean War. Israel and China had to wait until Nixon went to China in 1972 to begin a bilateral relationship.

The two sides quickly found common ground in the sale of Israeli weapons to China; for the next two decades—secretly during the 1980s but with increasing openness after the establishment of official ties in 1992—arms sales defined Sino-Israeli relations. As Israel became China’s second-largest weapons supplier, right-wing Israeli politicians chafing under the U.S.-led peace process suggested Beijing could emerge as an alternative to Washington. When Netanyahu visited Beijing in 1997, he expressed this sentiment to his hosts by remarking, “Israeli know-how is more valuable than Arab oil.”

Even as Israeli leaders anticipated a profitable future partnership with China, they failed to address growing U.S. unease with Sino-Israeli weapons sales. With China the key rival for U.S. strategists in the post-Cold War era, Jerusalem’s sale of advanced weapons to Beijing came under heavy scrutiny in Washington. During the 1990s, U.S. officials accused Israel of illegally providing China with weapons such as the Patriot missile, Lavi jetfighter, and Phalcon airborne radar system.

American pressure on Israel to cancel the Phalcon reached a fever pitch during the final years of the decade. During a historic visit to Israel in 2000 by Chinese President Jiang Zemin, Prime Minister Ehud Barak assured his guest the Phalcon deal would go through. But two months later the Israeli leader gave in and canceled the billion dollar deal. Having personally insulted the Chinese president just as China was prepared to usher in a new era of strategic ties, Jerusalem’s eastern aspirations imploded. Whatever was left of Sino-Israeli strategic ties collapsed five years later when the United States prevented Israel from upgrading Harpy drones previously purchased by the Chinese. Forced to again choose between Washington and Beijing, Jerusalem committed to no longer selling weapons to China.

If the Obama Administration took a more adversarial stance toward Beijing, Israeli officials remain uncertain whether history would repeat itself and Sino-Israeli relations would again fall prey to U.S. fears.

***

China’s leaders have been credited with long political memories ever since Henry Kissinger was famously told by Premier Zhou Enlai that the impact of the French Revolution was “too early to say.” Fortunately for Israel, China’s leaders in the last decade have been far more forgiving of what a former Israeli politician calls “one of the most wretched chapters in Israel’s diplomatic history.” Since Prime Minister Ehud Olmert’s visit to Beijing in January 2007, and especially since 2010, Sino-Israeli relations have rebounded to encompass new forms of commercial, military, political, and cultural exchange.

In the absence of arms sales, the trade and investment at the core of contemporary Sino-Israeli ties may seem fairly harmless to U.S. interests. However, the growing prominence of cyber-attacks between America and China, coupled with Israel’s position as the global leader in this field, may reopen a Pandora’s Box of pressure between Israel and the two global powers. Cyber-security is just one cutting-edge field, along with drones, in which Israel excels and China wants to improve—and where civilian applications blur the line over whether these dual-use technologies can be sold to China under Israel’s 2005 agreement with the United States.

Although China and Israel are no longer in the weapons business, both sides are still driven by similar motives that guided their trade in arms. Israel remains addicted to the export potential of the vast Chinese market. China is still interested in acquiring Israeli technology. A key difference from the past is that China’s interest in Israel is no longer only about modernizing the Chinese military. With Beijing trying to build an economy that relies on innovation rather than imitation, Israeli technologies are desired across a range of industries. In the absence of a collapse in China’s economy, these favorable commercial trends will likely only improve over time.

Or at least they are supposed to. So far, a few big deals—Intel Israel’s spike in sales to China in 2012 and a $2.4 billion Chinese acquisition of an Israeli pesticide company in 2010—exaggerate fairly modest commercial numbers. Meanwhile, elaborate Israeli schemes to export Israel’s new natural gas to China and to have the Chinese build a rail alternative to the Suez Canal across the Negev Desert remain years from any possible real-world completion date.

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As Chinese-Israeli Relations Enjoy a Second Honeymoon, America Frets

The last time China and the Jewish state drew close, the United States drove them apart. Now there’s even more at stake.