There are economic reasons for a superpower like China to employ mammoth firms for taking over ports, railways or electricity power stations and grids.
By ODED ERANUpdated: FEBRUARY 9, 2019 13:53Prime Minister Benjamin Netanyahu and Chinese VP Wang Qishan attend the Committee on Innovation in Israel-China Foreign Ministry(photo credit: GPO/KOBI GIDEON)
There are two forces creating the tsunami of articles on the Chinese “invasion” of Israel. The first is a genuine concern for possible damage to Israeli strategic assets. At stake are intellectual property assets, mostly in the cyber field and infrastructure projects of strategic importance such as ports and railways. The other force is the anti-China lobby and campaign ran by American ultra-conservatives that make US President Donald Trump look like a “philochinese.”There are economic reasons for a superpower like China to employ mammoth firms for taking over ports, railways or electricity power stations and grids. To maintain an annual real economic growth of above 6%, China needs to export, and the economic logic dictates exporting to the lucrative European and American markets. Distance and efficiency of transportation become then important factors in pricing Chinese goods, compared to those manufactured locally. Chinese companies have purchased ports in Sri Lanka, Pakistan, Oman, Djibouti, Turkey, Greece, Italy and Spain to expedite the movement of its goods and reduce dramatically the cost of transportation.This simple economic description is obviously naïve. China has a vision of becoming a leading military global power by 2050. When it invests billions of dollars in building ports, especially in the Indian Ocean and the Horn of Africa, there is a long-term military thinking behind it. China does not build military ports in the Mediterranean. But when the European Union intended to criticize China for its record on protection of human rights, it was Greece whose Piraeus port is totally owned and operated by a Chinese company, which also blocked the EU criticism of China. In most of the cases where Chinese companies gained concessions and a foothold in foreign infrastructure projects, it was done through huge loans to the local authorities, thus creating lender-debtor relationships.BUT THAT pattern is not governing the two concessions Chinese companies won to build the new wharf in Ashdod and to operate the one being built in Haifa. The government of Israel finances the two projects and remains in full control of them, although admittedly, there was not a sufficient and due discussion of all the security aspects before signing the contracts in 2015.All the security experts, who now ring every possible alarm bell, were silent for three full years. Several months ago, a “warning” by a nameless retired US Navy officer was made in the Israeli press. It claimed that the US Sixth Fleet ships will avoid Israel’s ports because of the Chinese presence, and since then, “experts,” piers and wharfs shake not because of the mighty Mediterranean waves, but for fear of losing the Sixth Fleet’s visits.If indeed a US Navy officer is the source of the warning, he should be directed to the American fleet’s official website, where he could read about the visit in 2018 of USS Carney to the port of Valencia, Spain, where the Chinese government-owned China Ocean Shipping Company (COSCO) controls 51% of the cargo port. Or, the officer could visit maintenance works by USS New York, also in 2018, to the port of Piraeus, owned by COSCO.The American admiral probably knows that important branches of the US Navy are located in the port of Seattle, where the large Terminal 18 is operated by, you guessed it right, COSCO. And that is not the only Chinese involvement in strategic American ports.The campaign to stop Chinese involvement in infrastructure projects has reached hysterical dimensions. If spying on the Israeli navy or the Sixth Fleet is the Chinese purpose, that could be done more easily and cheaply by two Chinese agents armed with excellent Chinese cameras and bugging devices strolling along Zionism Boulevard on the Carmel Mountain overlooking the port of Haifa.Much more serious is the potential risk to the industrial and academic hi-tech sector in Israel. That risk is not only emanating from China, but its vast available financial resources and its relentless drive to achieve world prominence makes it into a potential industrial predator. Other governments, such as those of the US, Canada, Germany, Japan and Australia, have been installing defense mechanisms against the foreign – i.e., Chinese – attempts to swallow leading companies and start-ups engaged in hi-tech, cyber and related fields.The Israeli government has also decided recently to probe the ways and means of protecting strategic assets. This is certainly the right and sober path, which will take into consideration the importance of maintaining relations with China and its economic prowess, opportunities and risks in the relations with China, the overall relations with the US, and the right mix of legal and administrative measures needed.The writer is a senior researcher at the Institute for National Security Studies and a former ambassador to Jordan and the European Union.
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