The Chinese-Israel Connection

The relationship between Israel and China cannot be described as a partnership due to its common secrecy and the nations’ varying and sometimes conflicting interests.

The nations are quite different and discrete from one another upon observations, as China has no indigenous Jewish community, while Israel has no indigenous Chinese community. Of course, as widely known, Israel is also closely affiliated with China’s main competitor in the world, the United States.

However, the China-Israel relationship has been expanding rapidly on a number of fronts, and the past few years have seen stark upticks in trade, investment, education exchanges, and tourism between the two countries.

Israel is looking to expand its diplomatic, economic, and strategic ties with the world’s fastest growing major economy and diversify its export markets and investments from the US and Europe. Although evolving relations with China present Israel with important opportunities, they also pose a variety of challenges.

In this article, we will present a historical overview of the relationship between China and Israel, as well as the latest developments and what motives lie behind them.

Historical relations

Israel was one of the first non-socialist countries to recognise the People’s Republic of China after its formation in 1949, while China was sympathetic with the formation of the state of Israel. This positive initiation of relations was short lived however, as in 1951, the United States pressured Israel to freeze ties with China and endorse the U.S. position on the Korean War at the UN.

Furthermore, relations between the Soviet Union and Israel underwent a dramatic downturn in 1953, after Jewish doctors in the Kremlin were accused of attempting to assassinate Joseph Stalin, a conflict in which China followed the Soviet Union’s side.

Despite Israel having sent their delegation to China in 1955, China prioritised development of relations with the Arab countries and rejected Israel’s request to participate in the 1955 Bandung Conference of Asian and African nations.

Consequently, from 1956, until the 1970s, bilateral ties and their development between the 2 nations were effectively non-existent. In fact, China had advanced so far in relations with the Arab states by the 1960s, that it had become hostile to Israel.

Beijing invited the new Palestine Liberation Organisation to open a semi-diplomatic mission, its first in a non-Arab country. China advocated for solving the Israeli-Palestinian conflict through armed resistance and provided various Palestinian factions with military training and weapons.

After this period of heightened hostility, supported the PRC’s UN bid, has had an honorary consul in Hong Kong since 1961 and upgraded it to a full-time consulate in 1972 or 1973 as a pathway for greater communications with China, and China toned down its criticism of Israel, while several meetings took place between Chinese and Israeli representatives.

The death of Mao Zedong and the rise of a new Chinese leadership, together with the 1977–1978 Israeli-Egyptian peace process, led to a slight modification of Chinese attitudes toward Israel.

China continued to condition formal ties on solving the Arab-Israeli conflict, and in 1979, China put forward a new requirement, which was the establishment of a Palestinian state.

The peace process between Egypt and Israel made China realize the importance of external mediation in the Arab-Israeli conflict and, in 1984, China proposed holding an international peace conference under the auspices of the five permanent members of the UN Security Council to resolve the Arab-Israeli conflict. This forced China to adopt a more balanced position, therefore improving relations with Israel through increased engagements.

In the summer of 1985, Israel reopened its consulate general in Hong Kong, in order to to reach out to China, and meetings between foreign policy officials, including UN Israeli and Chinese delegations, began to take place more frequently.

In late 1987, a high-level meeting took place between then Israeli Foreign Minister Shimon Peres and his Chinese counterpart Wu Xueqian, and by 1988, Israeli tourists were flocking to China. That year, China recognized the State of Palestine and upgraded its ties with the Palestinian Liberation Organization, but that did not affect the course of Israeli-Chinese ties.

After the Tiananmen Square incident, Western powers distanced themselves from China, as well as opening sanctions against them, which led to China opening the door for closer ties with Israel for arms sales. After the Gulf War, in which China supported the West, as well as the end of the Soviet Union, China re-established itself back in the international community, and established formal ties with Israel in 1992.

Until 2005, defense technology was the bedrock of Sino-Israeli ties, despite several major setbacks in the 1990s and 2000s, predominantly as a result of Israel favouring US military equipment over Chinese. From 2005 onwards, this defense cooperation started transforming into an economic partnership. The catalyst for these bilateral ties remains Chinese interest in Israeli advanced technology and Israeli pursuit of access to the large Chinese market. This cooperation has been steadily growing, and in 2013, Netanyahu passed Government Resolution 251, which directs the expansion of all nonsensitive aspects of Israeli-Chinese cooperation.

The shift to economic cooperation has led to a major expansion of bilateral ties, including significant Chinese investment and construction activity in Israel.

Latest developments

Trade between Israel and China has now surpassed $11 billion, a small figure when compared to China’s trade with the United States or Europe but two hundred times larger than it was twenty-five years ago.

The transition into an economic cooperation is visible, as Bright Foods’ acquisition of Tnuva, the largest Israeli dairy company, in 2014 marked the first major Chinese corporate foray into the Israeli market.

In April 2018, Chinese conglomerate Fosun purchased the Ahava company, maker of Dead Sea lotions. But the China-Israel economic relationship runs deeper than private Chinese acquisitions of Israeli corporate entities.

While visiting Beijing in 2017, Israeli Prime Minister Benjamin Netanyahu told an Israeli interviewer that China accounts for one-third of the investment in Israeli high technology.

Chinese investment in Israel is also focused on Israeli infrastructure projects. “China is also involved in building infrastructures in Israel, such as digging the Carmel tunnels in Haifa, laying the light rail in Tel Aviv, and expanding the Ashdod and Haifa seaports” and is entering the residential construction industry, said a 2017 report from Israel’s Institute for National Security Studies.

The influx of Chinese tourists to Israel has also risen rapidly, doubling to more than one hundred thousand from 2015 to 2017. In percentage terms, China is Israel’s fastest growing source of tourists.

However, it is Israel’s Technion Institute of Technology that has been at the forefront of these exchanges.

In 2013, Technion, along with Shantou University in China, was awarded a $130 million grant from the Li Ka Shing Foundation, founded by Hong Kong entrepreneur Li Ka-shing some forty years ago, to establish a branch in Guangdong Province. The province and Shantou municipality provided an additional $147 million and land for campus construction. Similarly, in 2016, the University of Haifa announced plans to build a joint laboratory at East China Normal University in Shanghai to research ecology, data, biomedicine, and neurobiology, an effort funded by the Chinese government.

This followed Tel Aviv University’s 2014 announcement that it would partner with Tsinghua University in Beijing to build the CIN Research Center, where research would focus on biotech, solar, water, and environmental technology development.

Political relations have also developed as Netanyahu has repeatedly expressed his hope that broader economic relations with China would translate to more alignment at the United Nations.

This has happened in the case of India, whose trade with Israel has surged in the last two decades. Following this uptick in trade, India, on several occasions in recent years, abandoned its previous pattern of voting with Arab states against Israel in the UN system.

However, China has not changed its voting pattern, and it aligns against Israel whenever there is a vote in the UN bodies.

Projected challenges

Despite growing China-Israel ties, there are looming challenges. As part of what has been identified as a broader Chinese strategy to expand engagement in the Middle East, China has cultivated ties with all major actors including various Arab states, Iran, and Turkey.

While Chinese President Xi Jinping has walked a fine line between Israel and its regional adversaries, deepened ties with Israel could create tension with some of China’s other regional partners, particularly Iran.

The Chinese state stance on Israeli settlements in the West Bank settlements could also be a source of friction. The government has refused to allow its laborers to work in the West Bank, citing its opposition to Israeli settlement construction there.

Furthermore, In Israel, there is some opposition to the recent expansion of bilateral relations. There are skeptics in several Israeli political parties and among former national security officials, who warn of potential security issues and possible friction with the United States resulting from Chinese involvement in Israeli infrastructure projects.

Still, the growth in the China-Israel relationship has clearly benefited both sides.

In Israel, China has found new investment opportunities and a new source of cutting-edge technology. For Israel, the relationship is the latest success of Netanyahu’s strategy of developing ties beyond the United States and the EU, China, as the world’s most populous country, is also a market for Israeli exports.

The shift to economic cooperation has led to a major expansion of bilateral ties, including significant Chinese investment and construction activity in Israel. Although there appear to be many obstacles ahead, it seems like the Sino-Israeli relationship will continue to grow on a general scale.