Klein: Netanyahu Should Consider Nixing Chinese Port Deal over U.S. Concerns

Israeli Prime Minister Benjamin Netanyahu, left, is greeted by Chinese President Xi Jinping ahead of their talks at Diaoyutai State Guesthouse Tuesday, March 21, 2017 in Beijing, China. (Etienne Oliveau/Pool Photo via AP)
Etienne Oliveau/Pool Photo via AP

TEL AVIV — In light of serious U.S. national security concerns, Prime Minister Benjamin Netanyahu should strongly consider nixing Israel’s shortsighted agreement with a Chinese government-controlled company to operate a new seaport in the Israeli coastal city of Haifa.

Haifa is home to Israel’s largest international seaport and has long been a safe docking hub for American warships from the Sixth Fleet. The Haifa port has routinely hosted joint U.S.-Israeli naval drills.

In 2015, the Shanghai International Port Group (SIPG), which is 44%-owned by the Chinese government, won a tender to operate the Haifa seaport for 25 years starting in two years. The deal faces renewed scrutiny from the Trump administration, which has been confronting China on trade and has expressed deep concern about the possibility of Beijing using its infrastructure and high-tech projects for espionage or expansionism.

U.S. National Security Advisor John Bolton reportedly recently told Israeli leaders that China could utilize its newfound foothold in Haifa to potentially spy on U.S. interests or strengthen its strategic position in the Middle East.

The close proximity of Chinese port workers to U.S. naval ships carries an obvious potential risk of espionage. According to multiple reports, the U.S. is so worried about the Chinese oversight deal that the U.S. Navy is considering making changes to its traditional operations at the Haifa port.

Additionally, the Haifa port deal and larger Chinese investment in Israeli infrastructure and high-tech have raised questions about whether U.S. intelligence shared with Israel could become vulnerable to Chinese spying.

One Trump administration official, referring to growing Chinese involvement in Israel, told Reuters that the U.S. does not want any impediments to sharing intel with Israel. “We specifically put it on the agenda,” said the official.

Gary Roughead, a former chief of U.S. Naval Operations, outlined the potential security risks of the Haifa port deal thusly: “The Chinese port operators will be able to monitor closely U.S. ship movements, be aware of maintenance activity and could have access to equipment moving to and from repair sites and interact freely with our crews over protracted periods.”

“Significantly, the information systems and new infrastructure integral to the ports and the likelihood of information and electronic surveillance systems jeopardize US information and cybersecurity,” Rougheed added, speaking at a conference last November at the University of Haifa.

Former Mossad chief Ephraim Halevy voiced concern over the port deal: “If Haifa becomes a port—the civilian part of it—which is directly controlled by the Chinese in a civilian mode, not a military one, nevertheless it is more than just a symbolic foot on the ground for the Chinese in a very strategic area of Israel,” Halevy said.

“That, of course, raises a lot of questions because of the policies of China with emphasis on its growing and spreading relations with Iran,” added Halevy.

In a stinging rebuke of the port deal, Israel’s Shin Bet security service chief Nadav Argaman warned in January that Chinese investments in Israel such as the Haifa project carry with them potential national security risks for the Jewish state.

Besides the Haifa port deal, a second Chinese firm won a 2014 tender to construct the South Port in Ashdod. A subsidiary of the China Civil Engineering Construction Corporation (CCECC) is helping Israel build the Tel Aviv Light Rail line, while another Chinese company will construct a hydroelectric power station in the Jordan Valley.

The exponential pace at which China has been expanding its involvement in Israeli infrastructure comes as Beijing is seeking to promote its Belt and Road Initiative, a development strategy with specific focus on securing Chinese infrastructure projects across Europe, Asia and Africa. China critics see the Belt and Road Initiative as a Trojan horse scheme to expand Chinese dominance globally, in part using a strategy of low bids to ensure successful tenders.

Beyond infrastructure, the growing Chinese investment in Israeli hi-tech firms is also setting off alarm bells in Washington.

A report four months ago by the Israel-based IVC Research Center Ltd. documented about $1.5 billion in Chinese funds invested in nearly 300 Israeli companies. Ilan Berman, a senior vice president at the American Foreign Policy Council, warned in an op-ed in Wall Street Journal about Chinese “influence over as much as 25% of Israel’s tech industry.”

The Trump administration has taken action to curb the global penetration of two of China’s largest network firms, Huawei Technologies Cos Ltd and ZTE Corp, both of which deny that their equipment is being utilized for spying purposes. Reuters reported on deals and potential deals between those Chinese firms and Israeli tech companies:

In December 2016 Huawei acquired Israel’s HexaTier, whose technology secures databases in the cloud, for $42 million. This followed a visit to Israel by the Chinese technology giant’s CEO. That same month it also acquired IT research firm Toga Networks for an undisclosed amount.

According to Israeli media, ZTE has shown interest in Israel’s tech sector since sending a senior delegation to the country in 2013.

“We are all concerned about theft of intellectual property and Chinese telecoms companies that are being used by China for intelligence-gathering purposes,” a senior Trump administration official told Reuters.

If it is not going to nix the Haifa port deal, meanwhile, Israel should at a minimum strongly consider founding a governmental agency similar to CFIUS, the Committee on Foreign Investment in the United States, a coalition of agencies that together review national security implications of foreign investments in U.S. companies and operations. According to local reports today, Netanyahu is already leaning in that direction.

U.S. Deputy Secretary of Energy Dan Brouillette recently told reporters in Tel Aviv that “we evaluate foreign investment in the United States very, very closely. We would hope that Israel would adopt a similar approach.”

Yaakov Amidror, chief of Israel’s National Security Council from 2011 to 2013, also advocated an Israeli governmental vetting process for foreign investments with national security implications.

“The problem isn’t China or Haifa Bay port, the problem is the mechanism,” Amidror stated.

“There’s no body that examines foreign investment in Israel that isn’t security related. If Saudi Arabia decided it wanted to buy a Tel Aviv skyscraper, there’s no supervising body.”

Aaron Klein is Breitbart’s Jerusalem bureau chief and senior investigative reporter. He is a New York Times bestselling author and hosts the popular weekend talk radio program, “Aaron Klein Investigative Radio.” Follow him on Twitter @AaronKleinShow. Follow him on Facebook.

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