Treasury joins White House, Pentagon in warning Israel over Chinese encroachment

Foreign and defense ministry officials have internally lamented that the SIPG agreement was not vetted through an inter-agency process.

January 16, 2019 18:41
2 minute read.
Treasury joins White House, Pentagon in warning Israel over Chinese encroachment

Chinese Premier Li Keqiang with Israel Prime Minister Benjamin Netanyahu attend a signing ceremony at the Great Hall of the People in Beijing, China March 20, 2017.. (photo credit: REUTERS/LINTAO ZHANG/POOL)


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WASHINGTON - Yet another Trump administration official expressed alarm this week over China's creeping influence over Israeli infrastructure.

Following statements of concern from the White House and Pentagon, a top official at the Treasury Department has now told Israeli cabinet members during a visit to the country that Chinese technology companies working in Israel pose a threat to intelligence cooperation between the longstanding allies.

The Trump administration has taken steps to curb market penetration by Huwaei Technologies Cos Ltd and ZTE Corp, two of China’s biggest network equipment makers, seeing them as spying threats. Both firms deny having any such purpose.

Interest by Huwaei and ZTE in Israel has worried its US ally, as has the green light it granted China’s Shanghai International Port Group in 2013 to build a private port near Haifa, a berth for the US Mediterranean fleet.

In December, The Jerusalem Post first reported of concern within the Navy over China's future role at the port.

"Our US Navy ships frequently visit Haifa, Israel, for both US-Israel bilateral military activity and port calls,” a spokesman for the Sixth Fleet told the Post.

“There is no change to our routine operations with Israel. Our partnership with Israel is steadfast. I can't speculate on what might or not might occur in 2021."

Foreign and defense ministry officials have internally lamented that the SIPG agreement was not vetted through an inter-agency process. Transportation Minister Israel Katz has told the Post that the security cabinet is now reviewing Washington's concerns.

Days later, US National Security Adviser John Bolton visited Israel and raised the administration's concerns with China's various investments in the country with Prime Minister Benjamin Netanyahu, two White House officials told the Post.

“We know that the threat of cyber attacks is growing each and every day,” US Deputy Secretary of Energy Dan Brouillette said in a statement to Reuters during a visit to Israel this week.

He said that in his meetings with Israeli officials, he would “share our experiences and concerns regarding certain Chinese foreign investment in Israel, and hope to continue a dialogue on best practices.”

One of Brouillette’s hosts, Israeli Energy Minister Yuval Steinitz, said in a statement after their meeting that the US deputy secretary had “raised their concern about the issue of foreign investments in the State of Israel.”

Asked separately about Chinese investment in Israel, Brouillette said in remarks aired by Israeli Army Radio: “If done incorrectly, you inhibit the other allies from sharing intelligence with you.”

In December 2016 Huawei acquired Israel’s HexaTier, whose technology secures databases in the cloud, for $42 million. This followed a visit to Israel by the Chinese technology giant’s CEO. That same month, it also acquired IT research firm Toga Networks for an undisclosed amount.

According to Israeli media, ZTE has shown interest in Israel’s tech sector since sending a senior delegation to the country in 2013.

Reuters contributed to this report.

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