Curtailing Chinese Investment in Israel: A Comprehensive and Cooperative U.S.-Israeli Strategy

Perhaps belatedly, the United States has realized that protecting its national security against Chinese threats also requires protecting its economic vitality, particularly in the form of its intellectual property. Thus, U.S. policymakers have begun to scrutinize, discourage, or even block Chinese investments in strategically important U.S. infrastructure projects and sensitive technologies as part of the emerging 21^st century U.S. national , and economic, security strategy. Washington must also convince and assist its allies to adjust their economic, and especially investment and trade, policies to do the same.

Israel can and should more fully join U.S. efforts to protect against Chinese penetration; it is a close U.S. partner, on which Washington increasingly leans to protect its interests in the Middle East, a “start-up nation” on the frontlines of technological breakthroughs, and a target of Chinese economic exploitation. Israel’s decision to allow a Chinese company to update and operate a terminal at the Haifa Port is the most pressing concern, potentially preventing U.S. Navy vessels from docking in Israel, but by no means the only one that Israel and the United States must address together.

This report from JINSA’s new Israel-China Policy Project, which is chaired by former Chief of Naval Operations ADM Jonathan W. Greenert, USN (ret.) and former Commander of the U.S. 7th Fleet VADM John M. Bird, USN (ret.), presents a wide variety of recommendations that Israel and the United States could individually enact as well as ways the two countries can cooperate. That means creating a comprehensive whole-of-government strategy for assessing and responding to Chinese activities in and around Israel, especially its investments in critical infrastructure and purchases of dual-use technologies. The United States, meanwhile, should not merely demand and expect cooperation, but recognize the economic pain that excluding China from the Israeli economy might entail and offer assistance in making the transition, including by promoting greater investment in, and commerce with, Israel.

By working together, the United States and Israel can protect themselves from Chinese economic exploitation, build deeper strategic and economic ties, and, perhaps most importantly, develop a model of democratic economic governance that can serve as the foundation for a new, broader international coalition against authoritarian great powers.