David Feith, an adjunct senior fellow at the Center for a New American Security, is a former deputy assistant secretary of state for East Asian and Pacific affairs.

How will Israel’s transition to a post-Benjamin Netanyahu government change Israel’s vital relationship with the United States? Much of the focus has been on policies toward Iran and the Palestinians, but there is another issue with enormous potential to solidify or harm the U.S.-Israeli relationship: Israel’s economic and technological ties with China.

The Biden administration, like the Trump administration, has recognized China as the United States’ chief national security threat and geostrategic rival. Despite political polarization in other areas, Democrats and Republicans support hardening U.S. policy toward China on matters including military posture, trade and investment, technology controls, cross-border data restrictions and academic exchange.

U.S. leaders are urging foreign friends to make similar adjustments to protect themselves — and their U.S. ties — from Beijing’s theft, espionage, coercion and other malign activity. President Biden, on his recent trip to Europe, underscored the China challenge, declaring, “We have to discredit those who believe that the age of democracy is over.”

Yet U.S. worries about China have been prominently belittled in Israel: Yossi Cohen, who stepped down last month as Israel’s powerful spy chief, said in a June 7 speech, “I do not understand what the Americans want from China. If anyone understands it, he should explain it to me. . . . China is not opposed to us and is not our enemy.”

Cohen’s air of unconcern reflects more than a decade of increasing ties between Israel and China.

On two visits to Beijing as prime minister, Netanyahu highlighted Israel’s interest in exporting technology to China. He also supported an Israeli role in Beijing’s “One Belt One Road” global infrastructure strategy and a bilateral free-trade agreement. “We are your perfect junior partner,” Netanyahu told Chinese President Xi Jinping in 2017. “I believe this is a marriage made in heaven.”

Chinese investors, state-owned enterprises and tech firms, such as Huawei and Alibaba, acquired or invested in some 463 Israeli companies between 2002 and December 2020, mostly in tech, according to Tel Aviv University’s Institute for National Security Studies. Every major Israeli university, like those in the United States and Europe, has partnerships with Chinese schools and laboratories.

Chinese firms built or are operating some $4 billion of Israeli infrastructure, including Tel Aviv’s light rail, the Ashdod port and the Carmel tunnels. Despite strong objections from the Trump administration, China’s state-owned Shanghai International Port Group is set to begin operating a terminal at Israel’s Haifa port this year, which could render it unusable for U.S. Navy vessels.

At Washington’s urging in 2019, Israel created an investment-screening body, but it does not cover high-tech industries.

Israel is similarly loose on export controls, even for “dual-use” commercial technologies of the type targeted by China’s “military-civil fusion” strategy. In 2016, while extolling the strengths of Israel’s cyber industry to a U.S. audience, Netanyahu noted: “I sure as hell am not going to let regulation interfere with that. I actually prevented regulation now on the cyber industry and we’re taking the risk.”

Israel, a small country ever fighting for its life, is in no position to spurn major markets and potential friends. But uncritical engagement has a price. China imposes costs, and so does the United States.

China backs Iran, Israel’s chief enemy. Beijing and Tehran this year signed a 25-year partnership — worth as much as $400 billion in trade and military cooperation, according to some reports. Some of the Chinese companies in Israel’s tech and infrastructure sectors also do business with Tehran.

During the clash between Israel and Hamas this spring, Chinese officials castigated Israel in harsh and even antisemitic terms at the United Nations, from the podium at China’s Foreign Ministry and on social media. Beijing’s main aim may have been to associate the United States, as Israel’s ally, with ostensible human rights abuses. But its posture was clearly unfriendly to Israel and helpful to Hamas and Iran.

Might Israel’s new leadership change course? Prime Minister Naftali Bennett, a former tech entrepreneur, was economy minister from 2013 to 2015, during which time he encouraged investment from China and opened four liaison offices there. Yair Lapid, the Israeli foreign minister and prime-minister-in-waiting, previously ran the Ministry of Finance, known for its optimism on China.

But there have been encouraging signs. Last month, immediately after taking office, the new government joined the United States at the United Nations in condemning Beijing’s human rights abuses in Xinjiang, Tibet and Hong Kong — a diplomatic first for Israel. That follows on the Netanyahu government’s decisions last year, after appeals from Washington, to keep Huawei out of Israeli 5G networks and to block Chinese acquisition of a major desalination plant.

As a sovereign, high-tech, democratic powerhouse, Israel has a fundamental stake in the contest between China and the free world. Israel is not anyone’s proxy. But neither does it benefit from being a carefree observer or conduit for sensitive technology transfer. The challenge for Israel’s new leaders, and their friends in Washington, is to adapt for the new realities of global strategic competition.

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