Shin Bet chief said to warn Chinese investment in Israel poses security threat

Nadav Argaman says Israel needs to put in place an oversight mechanism to prevent Chinese companies taking over key strategic infrastructure; US also urges Israel to act

Head of the Shin Bet security service Nadav Argaman attends the Defense and Foreign Affairs Committee meeting at the Knesset on November 6, 2018. (Hadas Parush/Flash90)
Head of the Shin Bet security service Nadav Argaman attends the Defense and Foreign Affairs Committee meeting at the Knesset on November 6, 2018. (Hadas Parush/Flash90)

The head of the Shin Bet security service warned this week that massive Chinese investment in Israel could pose a danger to national security, according to a Channel 10 news report aired Wednesday.

“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 said the Knesset needed to pass legislation to monitor foreign investment in Israel.

“There are gaps in Israeli law in regards to its security needs in terms of overseeing foreign investment,” he said, according to Channel 10. “This could be dangerous, legislation is needed.”

China and Israel have stepped up trade and business ties in recent in years and launched free trade talks.

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.

Prime Minister Benjamin Netanyahu and China’s President Xi Jinping (R) shake hands ahead of their talks at Diaoyutai State Guesthouse in Beijing on March 21, 2017. (AFP Photo/Pool/Etienne Oliveau)

According to Israeli media reports, concerns of growing Chinese involvement in sectors critical to national security led to the Finance Ministry scuttling deals to purchase insurance companies Clal and Phoenix in 2016 and 2017. Argaman was reportedly involved in those decisions.

During his visit to Israel last week, 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 on 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 any obstacles to being able to share 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.

A soldier walks on the deck of the US aircraft carrier USS George H. W. Bush, as it docks outside Haifa port, on July 3, 2017. (AFP Photo/AFP Photo and Pool/Ronen Zvulun)

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.

According to a source familiar with the matter, the Transportation Ministry committed a grave error when it chose the Chinese without consulting the National Security Council.

During his speech on Monday, Argaman also warned that a foreign country “intends to intervene” through cyberattacks in Israel’s national elections in April.

“A foreign state is planning on intervening in the upcoming elections in Israel, and it will intervene,” Argaman was quoted by Hadashot TV news as saying. “I don’t know at this stage in favor of who or against who.”

Israel’s military censor barred from publication much of what Argaman said, including the country named in his speech; however fingers were quickly pointed at Russia.

The Shin Bet later issued a statement saying that Israel “has the tools to locate, monitor and thwart attempts of foreign influence, if there should be any.”

On Wednesday, Prime Minister Benjamin Netanyahu said that as a world leader in cyber defense, Israel could fend off any foreign intervention in the upcoming elections.

“Israel is prepared to thwart a cyber intervention, we’re prepared for any scenario and there’s no country more prepared than we are,” he told reporters.

Meanwhile, Russia on Wednesday denied speculation that it was the state planning to disrupt the Israeli vote.

“Russia has never interfered in elections in any country and has no plans to do it in the future,” presidential spokesman Dmitry Peskov said in comments relayed by the Russian embassy in Israel.

Moscow has been accused of seeking to influence various elections around Europe — and the US presidential poll in 2016 — through disinformation campaigns.

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