US blunts Chinese push for Israeli defense tech

Israel ‘walking on a thin rope’ as it tries to balance economic interests with China and Washington

In 2020, the US gave $3.8 billion in aid to Israel — almost all of that was aid for military assistance.

According to the BBC, the support is part of an agreement signed by former president Barack Obama in 2016 for an overall package of $38 billion in aid over the decade 2017-2028.

This represents an increase of about 6% (adjusted for inflation) over the spending commitment for the previous decade.

So when the US tells Israel to cease and desist, they tend to listen. By the way, the only US president that actually withheld aid, to make Israel bend to peace efforts, was Jimmy Carter.

No other president since, has had the balls to do that. Which is perhaps why Israel has turned into a rogue nation, that attacks and assassinates its perceived enemies, at will.

This time, however, they went too far. And Uncle Sam, let them know.

According to Breaking Defense, several months ago the Biden administration warned Jerusalem that China is operating a web of companies inside Israel as part of a dedicated effort to acquire advanced defense technologies.

Sources would not say what technologies or companies have specifically been targeted, but did note that some efforts have already been uncovered and foiled.

As a result, Israel is launching a new effort to crack down on Chinese attempts to obtain Israeli defense technology, as the country gears up for a high-profile legal case, allegedly involving the sale of drones to Beijing, next month.

Sources in the Israeli defense establishment say that enforcement has ramped up as a result of increased Chinese efforts, including Chinese firms making direct contact with Israeli industrial experts, Breaking Defense reported.

The Biden administration, like the Trump administration, has recognized China as the United States’ chief national security threat and geostrategic rival, the Washington Post reported.

Despite political polarization in other areas, Democrats and Republicans support hardening US policy toward China on matters including military posture, trade and investment, technology controls, cross-border data restrictions and academic exchange.

China-Israel foreign relations continue to be an annoyance for the United States. Photo: China Daily.

Chinese attempts to infiltrate Israeli defense firms are not new.

Defense firms here have strict orders not to have any contact with China on issues that have a “smell of security or defense,” a security official in one of the Israeli defense industries said.

The Shin Bet, Israel’s internal security service, has been in charge of countering these efforts, Breaking Defense reported.

But, according to defense industry sources, the Chinese are now operating straw companies in an attempt to partner with Israeli companies to create corporations that can look very legitimate but, in fact, are aimed at moving Israel defense technologies to China.

The straw companies, sources say, are being used to disguise the real end-user of the technologies involved.

“These straw companies are well disguised and it is very hard to identify who is the real client,” an Israeli defense industry source told Breaking Defense.

As a result of the US warning, the Israeli internal security service has enhanced its efforts to uncover such attempts, and in recent months, the security department of the Israeli Ministry of Defense has issued a set of new instructions to industry.

According to the new instructions, any attempt to make contact with an Israeli defense company should be brought immediately to the Israeli internal security service and the security department of the ministry of defense.

“Only these organizations have the tools to uncover illegal attempts,” a source in one of the defense industries told Breaking Defense.

Yet US worries about China have been prominently belittled in Israel, the Washington Post reported.

Yossi Cohen, who stepped down last month as Israel’s controversial spy chief, offered an unabashed slap in the face in a June 7 speech, “I do not understand what the Americans want from China. If anyone understands it, he should explain it to me. . . . China is not opposed to us and is not our enemy.”

Meanwhile, in a bid to lessen tensions with Washington, Israel coordinated a virtual summit with Chinese officials on Monday, Jan. 24, sources told Axios.

The summit, led by Israeli Foreign Minister Yair Lapid and Chinese Vice President Wang Qishan, followed low-profile consultations on China last month between the US and Israeli governments — a sensitive issue given US concerns.

According to Axios sources, Israel and China agree to a three-year plan for cooperation on the economy, science, research and development, and technology.

Both Israeli officials stressed they were cognizant of US concerns and wanted to proceed with maximum transparency. So far, the State Department has not responded to this consultation.

The China situation has been thrown into the public eye due to a high-profile legal case against a drone company the Israeli government alleges was part of a multi-million dollar effort from a Chinese firm, Breaking Defense reported.

This case is viewed as more serious than previous efforts that have been uncovered, because it involved Israeli citizens and the test of the systems inside Israel itself.

In December, Israel’s Financial Department of the State Prosecutor’s Office accused 10 individuals and three companies of helping to sell loitering weapon systems to China without having received official approval.

The indictments will become official after the involved people will be called to a hearing with the authorities involved in the investigation. That is expected to happen in in February.

Sources say the Israeli government is “walking on a thin rope” as it tries to balance its economic interests with China and its longstanding reliance on Washington.

According to The Carnegie Endowment For International Peace, Israel and China established full diplomatic relations only in 1992, making Israel almost the last Middle Eastern country to do so.

Starting in the early 2000s, ties between the two countries began to blossom, mostly because the Chinese government started to view Israel as a global technology hub and began seeking to capitalize on Israel’s innovation capabilities to help meet its own developmental needs and strategic challenges.

In addition, as China’s rivalry with Israel’s leading ally, the United States, has heated up, Beijing’s interest in Israel also has gotten stronger.

In light of Israel’s status as a major technology hub and a leading US ally, China has sought to deepen its influence in Israel through media engagement and other forms of outreach.

On two visits to Beijing as prime minister, Benjamin Netanyahu highlighted Israel’s interest in exporting technology to China, the Washington Post reported.

He also supported an Israeli role in Beijing’s “One Belt One Road” global infrastructure strategy and a bilateral free-trade agreement.

“We are your perfect junior partner,” Netanyahu told Chinese President Xi Jinping in 2017. “I believe this is a marriage made in heaven.”

Alas, if US officials have their way, that marriage may be headed for the rocks.

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