April 22, 2019

The Eastern Sensation that is Israel – China Relations

Israel - China Relations are an economic pillar for both sides, and are constantly evolving. Credit: XXX

PM Benjamin Netanyahu has paid a visit to the Republic of China, in response to Chinese Emperor Xi Jinping’s invitation, to commemorate 25 years to the establishment of diplomatic relations between Israel and China. It is the fifth visit of an Israeli Prime Minister in China, the last one also held by Netanyahu in 2013, during his other candidacy as Israel’s Prime Minister.

The visit marked a milestone in Israel – China relations, as PM Netanyahu was accompanied by senior business delegation of dozens of Israeli businesspeople from the various industries and companies active in China, as well as from companies interested in penetrating the Chinese market. They attended a business forum with over 500 invited guests chaired by the Prime Minister, accompanied by the establishment of a series of new economic agreements aimed at helping the Israeli industry by continuing to increase the number of countries active in, and exporting to, China. Furthermore, PM Netanyahu met with the leaders of China’s largest corporations and attended the third joint Israel-China innovation conference.

The climax of the visit was the signing of cooperation agreements in aviation, education, bringing Chinese construction workers to Israel, science, health, environmental protection and a multi-year plan for a task force on strengthening bilateral economic ties. PM Netanyahu also met with his Chinese counterpart, Chinese PM Li Keqiang.

From the look of things, it is not hard to realize that Israel – China relations is a central pillar holding the Jewish State and the East together, with long, rich history in all fields of cooperation. The key to understanding major components in Israel’s Foreign Policy for the year 2017 and in general is to observe and comprehend exactly how extensive are the relations between the two states.

History of Israel – China Relations

For some time after the 1949 Chinese revolution, the People’s Republic of China was diplomatically isolated, because the US and its allies, including Israel, recognized the Republic of China, commonly known as Taiwan, as the legitimate government of China.

During the 1955 Asian–African Conference, China began secretly pursuing ties with the Jewish State back in 1955, on the Asian – African Conference. There – China expressed support for the Palestinian right of return, but refrained from denying Israel’s right to exist.

After establishing diplomatic relations with the US back in 1979, China also began to develop a series of secret, non-official ties with the State of Israel.

After further establishment of Military Cooperation, China eased travel restrictions for Israelis, while Israel reopened its consulate in Hong Kong, which would serve as the main point for diplomatic and economic contact between the two nations.

Israel and China established representative offices in Beijing and Tel Aviv, which functioned as embassies as well. The Israeli office was formally known as the Liaison Office of the Israel Academy of Sciences and Humanities. China was similarly represented by a branch of the China International Travel Service.

On 1992, full diplomatic relations were established in all fields.

Hard Chinese and Israeli Power

Military Relations between Israel and China began building up before diplomatic relations went formal and public, back in 1980. Israel sold arms worth around 4 billion USD to China at the time. The People’s Republic of China looked to Israel as an example for the creation and manufacturing of arms and technology, as it could not acquire it from the US and Russia.

As of today, Israel is China’s second-largest foreign supplier of arms. China has purchased a wide array of military equipment and technology, including communications satellites. The increasing military cooperation softened the Chinese approach towards Israel and paved the way for the growth of diplomatic ties. China is a vital market for Israel’s military industry and arms manufacturers, and the Jewish State acknowledges that by going as far as to limit its cooperation with Taiwan in order to foster closer ties with the Chinese ally.

Going beyond Military Relations in the fields of armament and arms trade, the People’s Republic of China sees Israel as a valuable ally in the Middle East, and, like most other countries – as a mentor in the field of Counterterrorism.

Pillars of the Economy

The Military Relations between the State of Israel and the People’s Republic of China are indeed strong. However, the stage indisputably goes to the powerful, knee-deep economic relations between the two states.

More than 1,000 Israeli start-up companies have set up operations in China to promote themselves and utilize the advance infrastructure of the Chinese population. On the Asian side – Israel’s open, innovative and risk-taking approach to high-technology as well as its rapid economic rise towards a high-tech superpower has been appealing to the typical Chinese entrepreneur. The concept of risk taking is not deeply rooted in China’s culture with its approach to failure, leading to the Chinese industrial leaders taking interest in the innovative Jewish Market.

Israel and China both promoted many agreements of great magnitudes, most notably, among others, is the economic cooperation agreement back in July 2011. The agreement was signed following a drastic growth in exports from Israel to China in 2010, roughly by 95%, to a sum total of 2 Billion USD.

The year of 2013 also showed great promise, as bilateral trades between the two countries increased further. Chinese investors began looking towards Israeli firms as potential sources. On that year, the two countries enjoyed massive financial growths and high end deals, such as:

  1. A Chinese donation of 130 Million USD to “the Technion” in Israel, with the purpose of establishing a new research center.
  2. The Chinese Capital of Beijin achieved a 2 Billion USD tender to build the “Med-Red” railway, which is destined to connect the two cities of Ashdod and Eilat through the Negev Desert, and has already been discussed upon between the governments.
  3. The establishment of a 300 Million USD joint research center between the University of Tel Aviv and Tsinghua University.
  4. A Chinese acquisition of a controlling stake in an Israeli Dairy Company named “Tnuva”, for more than 1 Billion USD. Said acquisition was the biggest Chinese acquisition from Israel since 2011.

2014 followed with amazing Israeli-Chinese high tech deals summing up at 300 Million USD. The trade relations between the two states topped at 2015, reaching a total of 10 Billion USD. In addition, Chinese information technology companies are making routine, grandiose investments in the State of Israel up to this day, showing deep interest in the Israeli technological market.

The State of Israel is also a part China’s “Asian Infrastructure Investment Bank”, and a founding member with that. The Jewish State joined in as a process of becoming a major economic partner for China.

The two states also hold many respectable achievements in the economic field of Agriculture, such as joint development of agriculture technologies and agriculture trade fairs. Most notable in that field is the massive Chinese delegations visiting Israel to study and absorb knowledge regarding crops yields and dairy production.

Collision of Interests

Despite close relations between the People’s Republic of China and the State of Israel, the Chinese ally also maintains strong ties with Palestine. China went as far as voting in favor of the UN General Assembly Resolution 67/19 back in 2012, which officially granted Palestine non-member observer status in the UN.

Furthermore, China yields many economic benefits from relations with Iran in the fields of gas, oil, trade, military, and most notably – nuclear weapons.

China assisted Iran in building a research reactor back in the 1980s, as well as supplying four other research reactors to promote the Iranian achievement of nuclear capabilities. The aid in the nuclear field came further in the form of the establishment of an enrichment plant, a nuclear power plant, and the establishment of a covert nuclear agreement between the two states (1990).

Today, however, China opposes Iran’s possible production and possession of nuclear weapons, but does not see any urgency in stopping it. China ultimately supported Resolution 1929 in the UN (2010) which imposed a fourth round of sanctions on Iran for its nuclear enrichment program, but initially opposed the sanctions due to their strong bilateral and nuclear cooperation. It was only through Israeli influence and lobbying that the Chinese support was given. In addition, China supported the establishment of investigation against Israel by the UNHRC for “war crimes” in Gaza during operation “Protective Edge” back in 2014.

Things may look complicated upon a deeper inspection, but the fruitful relations between Israel and China are undeniable.

PM Netanyahu’s visit to China concluded with amazing breakthroughs in relations:

  1. It was agreed to hasten the establishment of a free-trade zone between Israel and China and the work of the special economic cooperation committee.
  2. Prime Minister Netanyahu proposed the establishment of a fast track for Israeli and Chinese investors. It was agreed to advance the idea, which could lead to many joint agreements.
  3. Prime Minister Netanyahu also raised the issue of dedicating a direct air link between Shanghai and Tel Aviv.

Furthermore, the Israeli and Chinese sides signed a series of important bilateral agreements, namely the establishment of a multi-year task force plan, an agreement on foreign workers from China, an aviation cooperation agreement and the establishment of joint laboratories.

Since the start of 2017 things are looking very promising for the Jewish State following its official Foreign Policy of promoting relations with the East. As the fertile, economic ground between Israel and China is blossoming already, we can only look towards the future, which will guarantee the implementation and realization of the deep, very-existent ties between the two states.

Until then, we simple folk can continue enjoying our “China Towns” Restaurants, an already inseparable part of the Israeli cuisine.


Guy Golan
About Guy Golan 23 Articles
Guy partnered with David in the establishment of IsraeliDiplomacy and holds the position of Executive Director. He has written many articles regarding Israel's relations with Foreign Countries. An experienced analyst in International Affairs, Guy has years of knowledge from his military service in the prestigious International Cooperation Division of the IDF.

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