Expanding US blacklist on China impacts Israel

New Ashdod port being built by China Harbor  / Photo: Eyal Izhar, Globes

The absence of a clear Israeli policy in light of the US-China trade war could leave Israeli companies vulnerable to US blacklisting.

Tensions between Beijing and Washington are heating up and the US has imposed sanctions on 24 Chinese companies involved in building islands in the South China Sea, which the US sees as an illegal attempt to control shipping routes. The Trade blacklist includes China Communications Construction Company (CCCC), whose subsidiaries include China Harbor Engineering Co. (CHEC), which is building Israel's new southern port, just north of the existing Ashdod Port.

CHEC began building the port in 2014. Fortunately for Israel, CHEC is not specifically named on the US blacklist but the inclusion of its parent company switches on a warning light for the Israeli government. US Secretary of State Mike Pompeo could broaden the sanctions at any moment and he came to Israel several months ago just to warn Prime Minister Benjamin Netanyahu that the Israeli government must fall in line with on Chinese investment, and quickly. IsraeI is very likely, very soon, to be told by the US to reduce working with China Harbor.

Carice Witte founder and executive director of the SIGNAL Sino-Israel Global Network and Academic Leadership think tank told "Globes" that Israel does not have a policy on China. "We are in the midst of a mighty struggle between the two super-powers and Israel, whether it wants or not, is part of this struggle."

She added, "It seems to me that these sanctions that we are seeing now are another wave and the fallout from these sanctions could also reach Israel. To date Israel has no clear policy that defines the limits for all the players whether they are foreign players like the US and China or on the domestic Israeli scene like the business sector and government ministries. The absence of policies might cause damage to Israel by harming the interests of the US, its most important ally, and our various diplomatic, economic and trade interests with China.

According to Witte, "Just yesterday the Israel Innovation Authority issued a call in which it invited Israeli startups to join a roadshow to meet Chinese investors. If Israel does not set out clear which core technologies are prohibited for trade with China, and which technologies are permitted, it might cause damage to Israeli startups, which would be blacklisted by the US, and that's only one example.

en.globes.co.il - on September 13, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020

New Ashdod port being built by China Harbor  / Photo: Eyal Izhar, Globes
New Ashdod port being built by China Harbor / Photo: Eyal Izhar, Globes
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