Netanyahu May Have to Choose Between Trump and China

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In the last few years, China and Israel appear to be willing partners in each other. Startup Israeli startup startup startup startup startup startup startup startup startup startup startup startup startup startup startup Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli Israeli

Prime Minister Benjamin Netanyahu shakes hands with President Xi Jinping Photo: Haim Zach / GPO

Israeli Prime Minister Benjamin Netanyahu called trade relations between the countries "a marriage made in heaven." He has repeatedly praised Chinese business executives, a recent example being Jack Ma, the head of e-commerce giant Alibaba.

Israel-based market research firm IVC took a crack at quantifying
Chinese investments in the country's tech scene is now up to $ 600 million in each of the last three years.

IVC found that Chinese investors, who are more likely to be connected to the market, are more likely to be strategic investors in Israel.

New data
from Israel's Central Bureau of Statistics shows that Israel exports $ 2.8 billion in the first half of 2018, a 73% increase compared to last year. China was the destination country for 8.7% of Israeli exports for the last six months.

These figures do not include trade with Hong Kong. Exports to the Chinese semi-autonomous region in the first half of 2018 were valued at $ 2.2 billion, only a slight decrease from last year.

The cozying up between the two countries may prove to be awkward for Netanyahu in his relationship with the White House.

Since his election in 2016, Trump has appointed an ambbadador to Netanyahu's West Bank policy and formally relocated the U.S. embbady from Tel Aviv to Jerusalem, a long-term policy sought by the Israeli prime minister. Trump also withdrew from the Iran nuclear deal in an endorsement of Netanyahu's position. Trump's willing to make overtures to Israel has run out of money.

Netanyahu, therefore, has worked closely with other countries.

In a long-anticipated move, Trump recently decided on $ 50 billion in tariffs on Chinese imports. His administration has cast China as an unfair economic actor that is trying to siphon away American wealth and technology for its own benefit. At least on the issue of Chinese acquisition of U.S. technology, Trump has allies across the aisle.

The Committee on Foreign Investment in the United States, a federal body known by its acronym CFUIS, has been cracking down on deals with Chinese investors that are deemed to be against the national interest. Congress recently pbaded the Foreign Investment Risk Review Modernization Act, which empowers the United States. The worry is that Beijing is using these deals to gain access to the critical knowledge that the U.S.

Israel would seem to offer China a more accessible repository of technology.

But there are murmurs that suggest Israel should tread with caution it pushes its luck with the White House too far. Last week, conservative commentator Tom Rogan wrote a column
in the Washington Examiner entitled, "Trump must warn Israel on its China trade."

He cautioned that Israel's "rapidly growing economic relationship with China's security and intellectual property interests."

"With time, unchallenged by the U.S., Israel would have little reason to prevent U.S. technologies from falling into Chinese hands," Rogan wrote. "That means a major undercutting of U.S. military capability."

Israel may have already heard the message. A few months ago, Netanyahu directed his chief economic adviser Avi Simhon and national security adviser Meir Ben-Shabbat to design a mechanism for foreign investors in Israel, Israel's Channel 10 reported in July. According to the story, Simhon informed the lawmakers of the plan during a confidential parliamentary committee meeting. The discussion among Simhon, other government officials and lawmakers revolved around the issue of China and Trump's tariff policy, according to the report.

Contacted by Calcalist on Sunday, Simhon declined to comment. A spokesperson for the parliamentary committee declined to comment.

The Israeli Prime Minister's Office Calcalist.

Israel already has in place some measures that give the government the power to halt business deals involving foreign companies. For one, the Israeli Ministry of Defense has an office that reviews application to export weapons and military technology. Another branch of government, the Israel Innovation Authority, has vetoed power over certain decisions made by Israeli tech companies. For years, a vast number of startups applied for.

If Netanyahu's Government Enacts the Limits of Chinese Money, it would be an extraordinary result of the policy of recent years.