We often do not hear about crisis in the US-Israel relationship. The foundation of that alliance has been based upon shared security interests as well as values going back to the 1973 Yom Kippur War where Israel’s very existence was tested and saved by US military aid. But the 2003 purchase of Harpy drones systems by China from Israel Aircraft Industries led to a huge blow up in relations between the two countries. The Bush administration demanded the resignation of the Israel Defense Ministry’s Director General, Amos Yaron and a ban on Israeli weapons industry sales to China. Israel would ultimately acquiesce to US demands, even creating a Department for overseeing future defence exports, but not before a suspension of various levels US-Israel military and intelligence cooperation for several months, including the Joint Strike Fighter project which has resulted in the F-35 stealth fighter in 2005.

There is no crisis in US-Israel relations today. In fact, there are those who would argue that relations between the two countries have never been better. President Trump’s recognition of Jerusalem as the undivided capital of Israel and his withdrawal from the Joint Comprehensive Plan of Action, also known as the Iran nuclear deal, have all received significant support from Prime Minister Netanyahu and the ruling coalition.

Over time, Israel’s relationship with China has also undergone significant change. While Israel institutes a ban on the sale of military technology and hardware to China following the 2005 Harper Crisis, Israel has still seen a massive increase in Chinese activity in its domestic economy. According to the Economist, the first half of 2018 saw Israel sell $3.5 billion worth of goods and services to China, a 63% increase from the first half of 2017. China’s direct investment into the economy through merger and acquisitions of Israeli companies stood at 16 billion dollars in 2016 and continues to rise. China is also engaged in massive infrastructure projects throughout the country, including the Carmel tunnels in Haifa, the Tel Aviv light rail and the development of Israel’s commercial seaports and the high speed trains that will connect them.

It is the Chinese investment in critical infrastructure, specifically Israel’s seaports, and the acquisition of dual use technology companies that is causing serious concern, as some within both the Israeli and American defence establishments begin to voice their concerns.

In 2015, the Shanghai International Port Group (SIPG), a Chinese state-owned corporation, acquired the tender for the development and operation of Israel’s largest commercial port in the northern city of Haifa. The port is adjacent to the home of Israel’s Navy and alleged nuclear-armed submarines. It has recently come to light that the sale of the port tender, which will be fully operational by 2021, was done with no consultation with either the Cabinet or the National Security Council, a serious concern when discussing something of such critical importance to the national infrastructure of a small state and its national security. This will directly affect Israel’s relationship with the US 6th Fleet which is based in the Mediterranean and the sharing of US military technology and hardware with Israel’s Navy. This is only one example amongst several of Chinese state owned companies operating too close for comfort to Israel’s sensitive national security apparatus installations. The lack of regulation or oversight may increase such instances in future.

China’s mergers and acquisitions efforts have also focused on sectors of Israel’s economy that are of critical national security concern. Israel’s technology sector is amongst the best in the world and Israel is widely regarded as one of the leading cyber powers. China has pursued a policy of gaining access to technology is often termed ‘dual-use’ as to its possible multipurpose use in both military and civilian spheres. Technology within the fields of artificial intelligence, cyber security and surveillance are just a few of paramount importance for the battlefields of tomorrow, and when taken in context of the escalating US-China global competition there is serious cause for concern for those who believe in the critical importance of the US-Israel alliance.

Trade is important for Israel, a country of more than eight million that is at the beginning of a significant population boom is in serious need of foreign direct investment and much needed large-scale infrastructure projects. But legitimate American concerns about economic and corporate espionage as well as a Chinese tendency to leverage its economic might for foreign policy objectives that may run contrary to American or Israeli interests must be taken seriously.

Israel also has a unique opportunity to leverage its growing clout in Beijing to further its own interests, especially vis-à-vis Iran. China is Iran’s largest trading partner and Chinese cooperation was crucial in the effectiveness of the international sanctions regime that was placed on Tehran before the implementation of the Iran nuclear deal. Prime Minister Netanyahu would do well to continue to leverage this relationship for Israel’s benefit while being wary of Israeli dual-use technology falling into Iranian hands via China, which has been instrumental in helping to modernize the Iranian armed forces.

Israel is approaching a crossroads. It is a small but important port of call on the Belt Road Initiative, and a founding member of the Asian Infrastructure Investment Bank; both central to Chinese foreign policy and economic interests. But Israel is still – and will remain for the foreseeable future – a strong ally of the United States. Israel must create boundaries within the context of the warming Sino-Israel ties and implement safeguards to protect its economic and national security interests from potential Chinese interference, otherwise Israel may find itself drawn unwittingly into the growing Chinese sphere of influence.