US Secretary of State Mike Pompeo was in Israel for just a few hours yesterday. He held a series of meetings with Prime Minister Benjamin Netanyahu, MK Benny Gantz who will succeed Netanyahu, and MK Gabi Ashkenazi who will be Minister for Foreign Affairs.
The visit came as relations between the US and China are at a new low point and Pompeo strongly hinted at his dissatisfaction with China by praising Israel. Speaking at the prime minister's residence, he said "You’re a great partner. You share your information, unlike some other countries that try and obfuscate and hide information. And we’ll talk about that country, too."
In recent years there has been no lack of evidence that Israel-China relations bother the US administration. Following US pressure, Israel set up a 'Committee for Approving Strategic Investments' in October 2019 for deals that involve issues of national security.
Another example of US pressure on this matter was reported by Channel 13 New journalist Barak Ravid earlier this week. He claimed that Israel is reconsidering the involvement of a Chinese company in building the Sorek 2 water desalination plant at Kibbutz Palmachim. The reconsideration is taking place after US administration officials contacted Israel and asked for clarifications about the participation of a Chinese controlled company in the construction tender.
An Israeli government source said that this matter is being discussed by the investments committee. "Globes" has been told in the past that there are US officials who very closely follow the work of the Investments Committee including the subject of specific infrastructures such as water, ports and transport. The prime minister's office and US administration spokespeople declined to comment on questions about the content of talks between Pompeo and Netanyahu, Gantz and Ashkenazi.
Haifa Port in final stages of construction
Earlier this week "Globes" revealed that on May 5 a small fleet of ships set sail from China carrying six huge cranes for unloading cargoes from ships - some of them as long as 72 meters. Their destination is the new port in Haifa Bay, which is fast being built, before being handed over to Chinese government company SIPG to manage for 25 years. In the coming weeks 24 more such cranes will set off on their journey to Israel.
The press release published by Chinese crane manufacturer ZMPC stressed the national importance that China places on Haifa Port. "This is an important milestone in the Chinese government's Belt and Road project (also called the new silk road). This project is a huge investment strategy of infrastructure ventures spanning more than 70 countries, which the Chinese say will bring regions closer together and the links between them and according to non-Chinese commentators will increase Beijing's influence on the global economy.
The crane manufacturers even added that due to a lack of manpower because of Covid-19 special emergency procedures were operated to check out the mechanics of the cranes to ensure that they were delivered on time.
This was not the first time in recent months that official Chinese sources have openly referred to the new Haifa Port as a political achievement and an integral part of "The string of pearls on the silk road project."
A blatant encroachment on the US sphere of influence
Haifa Port is one of a string of dozens of ports stretching from the Chinese coast along the Indian Ocean to the Suez Canal and onto main ports in Turkey, Greece, Italy, Spain and along the coast of Africa. All the ports are controlled by Chinese government companies to one degree or another. These include the huge Greek port of Piraeus, which is fully controlled by a Chinese government company.
Haifa Port has major business and logistical significance for the Chinese because it is a potential land gateway and bypass for conflicts in a fragile geopolitical region. It also has symbolic significance as a foothold in a country considered the most prominent ally of the US in the Middle East and Eastern Mediterranean. It is a small diplomatic victory for China in the short term, and the basis for increasing its economic and diplomatic involvement of China in Israel in the long term.
The US Sixth Fleet, which is a permanently anchored guest in Haifa, is following development with great concern and openly claims that the Chinese are using the Silk Road project as 'credit and bribery trap' to intensify their economic and political control through loans and investments in weak economic countries along the route. Consequently, in the past two years, Trump administration figures have tried to halt the handing over of ports to the Chinese through official, intelligence and media channels.
This subject has become all the more sensitive due to the advent of the Covid-19 crisis, which has left many countries on the Silk Road's route between East Asia, the Middle East and Africa even weaker economically, with growing deficits, crippled trade and employment, ballooning national debt and a lack of resources to invest in strategic infrastructures.
US intelligence sources fear that the Chinese are exploiting the situation and their liquidity reserves to assist these countries and expand their influence to an irreversible level, while taking control of many strategic assets, resembling the Marshall Plan that the US implemented after the Second World War.
Israel itself is digging itself into an economic hole to cope with the crisis, and many new credit lines will need to be opened to fill it back up again. This provides a golden opportunity for a world power like China to increase its involvement, especially due to the warm embrace that the Chinese leadership has openly been given by top Israeli government figures, especially by Minister of Transport Yisrael Katz, who is set to become Minister of Finance in the new government.
Chinese sources estimate that a free trade agreement between China and Israel could be signed in the near future. Such an agreement could strengthen the influence in the management of the new port at Haifa and even lead to the creation of a free trade zone of the kind that China has opened along the Silk Road project.
This is a scenario that keep the Americans awake at night.
In this situation, there will likely be growing pressure by the US administration on Israel to delay or even neutralize Chinese involvement in the Haifa Port project. On the other hand the dispatch of port cranes from China and the start of the shipping of the heavy infrastructure equipment to the port in Israel, which stands ready to receive it, indicate that the project has probably already passed the point of no return.
The US complaints will probably be handled by the new government with diplomatic finesse, "A polite response, then ignore it."
Published by Globes, Israel business news - www.globes-online.com - on May 14, 2020
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