Growing Concern: Deep Penetration of China in Major Israeli Infrastructure Puts Israel on Alert

By Arie Egozi

Foreign Affairs

Tel Aviv: There is  a growing concern in Israel from the deep penetration of China into major Israeli infrastructure projects. The US is putting heavy pressure on Israel to avoid any further involvement of Chinese companies in such projects.

According to Israeli daily Calcalist, a letter was recently sent to the chairman of the Israeli parliament foreign affairs and defence committee, Yuli Edelstein. In the letter there is a demand to hold an urgent discussion regarding China’s holdings in infrastructure projects in Israel. The main reference is to the dock at Haifa Port which is managed and operated by a Chinese company, but other holdings are also mentioned.

“Despite warnings from the security establishment, in the last decade, the Chinese government has invested extensively in strategic assets in Israel,” Dr Harel Menashri writes in the letter. Menashri is one of the founders of the cyber unit at the Shin Bet and is currently the head of the cyber faculty and a senior lecturer at HIT, Holon Institute of Technology.

According to him, his concerns began even before October 7, but they have increased since then and in his opinion are not receiving enough attention, even though China is radicalising its positions towards Israel.

“The disaster we experienced on October 7 taught us to heed the warnings of the security establishment and I would like to warn of a similar situation. When it decides the time is right, China may be able to stop the operations of critical infrastructures in Israel,” Dr Menashri highlights in the letter.

In recent months, it became clear that China is looking to enhance military cooperation with Iran. This increased dramatically, the concern in Israel about the involvement of China in some major infrastructure projects in Israel.

The issue is not new. Some years ago, the US had warned Israel that China is operating a web of companies in an effort to set its hands on very advanced Israeli defence technologies. The details are classified but sources say that some such attempts were uncovered and foiled.

One such attempt was the basis for an investigation and a warning issued to a group of Israeli experts. They were ordered to stop unauthorised transfer of defence technology to China.

The Israeli security organisations have in recent years uncovered some of these attempts and foiled them. The Israeli defence companies have strict orders not to have any contacts with China on issues that have a “smell of security or defence”.

While the orders to the companies are clear and strict, the Israel Shin Bet, the internal security service, had some years ago discovered that some Israelis have established contacts with China. In recent years, Chinese companies have been performing major infrastructure programs in Israel.

The US is unhappy with the access the Chines companies get to these different critical systems in Israel. In some cases the Israeli government reversed prior decisions and hired non-Chinese companies for some big programs.

In recent years the Chinese have made big effort to penetrate Israeli systems using cyber-attacks. Most of these attacks were foiled by the special Israel Cyber defence units. But, according to sources the Chinese are operating “straw” companies in an attempt to hire Israeli companies to create cooperation that can look very legitimate but in fact are aimed at putting hands on Israel defence technologies. The Israeli internal security service has enhanced its efforts to uncover such attempts.

The security department of the Israeli ministry of defence issued a set of instructions aimed at spotting attempts to use Israeli developed defence technologies by China. The Israeli ban on exporting defence technologies to China is in place since 2000 when, under intense American pressure, Israel had to cancel the sale of the Phalcon Airborne Early Warning System to China.

The Phalcon was developed by state owned Israel Aerospace Industries and heavy pressure from Washington killed the deal. Following the cancellation of the very advanced contract, Israel had to pay China US $ 350 million as compensation.