Israel in the trade war crossfire

Transport Minister Yisrael Katz with Chinese workers on light rail project photo: Reuters

Israel has never enjoyed closer relations with a US administration, but the Chinese have become indispensable to its infrastructures programs.

The global trade war is here, and Israel is in it up to its neck, completely against its will. Just a week ago, US Internet giant Google cut ties with Chinese communications equipment provider Huawei, and aircraft manufacturer Boeing received threats of lawsuits from Chinese companies and government agencies. The world's financial press gives constant coverage to the trade war: what the next steps could be, how the global economy will be affected, and how countries that find themselves caught in the middle between the two superpowers will behave. In Israel, the subject has not aroused great media interest, mainly because it is unconnected with the main, really the only, story that interests us: the prime minister, the immunity law, and the chances of the candidates to replace him.

Israel is a secondary and unimportant arena in the global struggle between the US and China, and is trying with all its might to remain so. "If Israel is pushed into standing in the middle, between the tectonic movements of these two giants against each other," said Minister of Transport Yisrael Katz, "we will not be able to stay afloat."

Israel's attempt to remain neutral is not self-explanatory. After all, Israel has never been closer to the US administration and has never before enjoyed gestures such as the current US president has bestowed on it. China, on the other hand, does not conceal its ties with Iran, on which it is dependent for its oil supplies. Nevertheless, when the US asked Israel to cancel the concession awarded to a Chinese company to operate the Bay Port in Haifa, a concession that the US claims endangers ships of its Sixth Fleet that visit the neighboring naval base, it was given the cold shoulder in Jerusalem.

"As I said in the discussions," Katz related in the same rare public utterance, "it's no secret - the horses have already bolted from the stable." Katz knows what he's talking about. He is the pivotal player in the ties that the Chinese have built up here in the past few years. He opened up the NTA tenders for the Tel Aviv Light Rail to them, and the tenders for constructing and operating the new ports in Ashdod and Haifa.

Anyone who has followed China's actions here cannot but be impressed by their understanding of Israeli politics, their recruitment of the right go-betweens close to those with their hands on the levers of power, and by their slow, cautious progress towards conquering the infrastructures market in Israel, under the noses of North American and European companies.

Even if Katz does not remain as minister of transport for a fourth term, the Chinese will have people to work with in the government.

For all that, something has changed in the past few days. US pressure is starting to produce results. A Chinese government company was recently ejected from a large power plants tender, even though it met all the threshold conditions. Quiet messages are being conveyed about other tenders, such as for the light rail systems in Jerusalem and the Tel Aviv area. The question is whether this is not too little too late. Last week, "Globes" reported that five candidates had applied to bid in the tender for constructing a tunnel under Ibn Gvirol Street in Tel Aviv for the Green Line of the Light Rail, all of them Chinese.

Published by Globes, Israel business news - en.globes.co.il - on May 26, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Transport Minister Yisrael Katz with Chinese workers on light rail project photo: Reuters
Transport Minister Yisrael Katz with Chinese workers on light rail project photo: Reuters
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