A senior US energy official warned Tuesday that unless Israel implements stringent screening procedures for Chinese investments, intelligence sharing between the two allies could be threatened.
US Deputy Secretary of Energy Dan Brouillette was visiting Israel for meetings that included talks with Energy Minister Yuval Steinitz and the head of Israel’s cyber directorate, Bloomberg reported.
China and Israel have stepped up trade and business ties in recent in years and launched free trade talks.
While urging vetting of all foreign investments, Brouillette made it clear that China was the primary concern.
The head of Israel’s Shin Bet security agency was said to raise similar concerns last week over China’s involvement in the country’s national infrastructure.
Brouillette encouraged Israel to take “aggressive steps” to monitor foreign investment to guard against any weaknesses in Israeli infrastructure which could compromise intelligence sharing with the US.
“We know that the the threat is growing each and every day,” Brouillette told reporters. “We’re going to share our experiences with China and let folks know that we have concerns with certain activities that we see coming out of China, specifically certain companies.”
Brouillette said the US would help Israel to set up a system similar to the Committee on Foreign Investment in the US, an inter-agency forum that reviews the implications and influence of foreign investments on US national infrastructure.
“We evaluate foreign investment in the United States very very closely,” he noted. “We would hope that Israel would adopt a similar approach.”
It is likely that other US officials will come to Israel to help set up a filtering process, especially from the Treasury Department, Brouillette added.
Following a meeting between Steinitz and Brouillette, the National Infrastructure and Energy Ministry said in a statement the US deputy secretary “raised concerns over foreign investment in Israel, and expressed hope to continue a dialogue on best practices.”
They also discussed developing Israel’s offshore natural gas reserves and energy cooperation with Egypt, the statement said.
Last week Channel 10 reported that Shin Bet security service chief Nadav Argaman warned massive Chinese investment in Israel could pose a danger to national security.
“Chinese influence in Israel is particularly dangerous in terms of strategic infrastructure and investments in larger companies,” Nadav Argaman said at a closed-door speech at Tel Aviv University on Monday.
Argaman — who in his speech also warned of foreign meddling in the upcoming Israeli elections — noted that Chinese companies would be taking over operating part of the Haifa port and constructing the Tel Aviv light rail system, and were actively seeking to acquire other major Israeli firms.
Argaman advised the Knesset to pass legislation to monitor foreign investment in Israel.
Chinese firms have made major inroads in Israel, including the takeover of local food giant Tnuva in 2014 and deals to manage the key Haifa and Ashdod ports.
During his visit to Israel earlier this month, US National Security Adviser John Bolton encouraged Israeli officials to take a tougher stance against Chinese electronics manufacturers ZTE and Huawei, a US official said last Wednesday.
“We are all concerned about theft of intellectual property and Chinese telecoms companies that are being used by China for intelligence-gathering purposes,” said a senior administration official who was briefed on the talks, according to Reuters.
According to the report, the administration does not want there to be any obstacles to block the sharing of sensitive information with the Israelis. The senior official singled out concerns about Chinese technology and investment at the port of Haifa.
“We specifically put it on the agenda,” the official said.
Several analysts and officials have in recent weeks expressed great concern over the deal that would put the Shanghai International Port Group in charge of Haifa port’s container terminal starting in 2021.
Allowing Beijing a foothold in so strategically important a location, close to an Israeli naval base, they fear, could compromise Israeli intelligence assets and even lead US military vessels to avoid docking at Haifa altogether.
In October Prime Minister Benjamin Netanyahu and China’s Vice President Wang Qishan co-hosted a high-profile trade and innovation conference in Jerusalem. Netanyahu announced at the time that the two countries would complete a free trade agreement in 2019, and that China plans to invest heavily in Israeli infrastructure, including new ports and a light rail.