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25 November
Wednesday

Asia

Israel gets caught between US-China rivalry

Israeli government this week rejected Hong Kong firm for tender to build and operate desalination plant after US warning

CK Hutchison Holdings Photo: Nora Tam

/NOVOSTIVL/ China’s investment ambitions in Israel were dealt a blow this week, and analysts say the relationship is under increasing pressure, with the Middle East nation and key US ally caught in the rivalry between Beijing and Washington. This article appeared in SCMP.

The Israeli government on Tuesday awarded the contract to build and operate a US$1.5 billion infrastructure project to local company IDE Technologies, rejecting an affiliate of CK Hutchison Holdings, which was founded by Hong Kong billionaire Li Ka-shing.

The project, Sorek 2, will be the world’s largest desalination plant, with capacity to produce 200 million cubic metres of water annually – a quarter of the water Israel uses each year – in the south of Tel Aviv near an Israeli military base that is also used by the US.

The decision was made little more than a week after US Secretary of State Mike Pompeo said the United States did not want the Chinese Communist Party to have access to Israeli infrastructure and communication systems during a visit to the country.

It is the latest setback for Chinese investment in Israel – a tech powerhouse and key stop on Beijing’s Belt and Road Initiative – since the two countries signed a “comprehensive innovation partnership” agreement in 2017. Israel’s national security cabinet was reported to be revisiting a 2015 deal between the Israeli Transportation Ministry and Shanghai International Port Group involving the Port of Haifa, which regularly hosts joint US-Israeli naval drills and vessels.

In addition, the Israeli Security Agency reportedly blocked the inclusion of Chinese companies in Israeli communications infrastructure after receiving warnings from senior US officials including President Donald Trump. Israel had set up a committee to review foreign investment – not specifically Chinese – in October, but it was not enough to satisfy US officials.

After examining 92 business deals in Israel by Chinese companies between 2011 and 2018, the report found 11 that potentially raised concern for Israel or the United States, including the expansion of the Ashdod port, partial construction and operation of a new terminal by the Haifa port, construction and operation of the Tel Aviv light rail, and the digging of the Carmel Tunnels near Haifa.


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