Opinion Between China and the US: Israel on a tightrope | Israel Today

Recently, the tightrope on which Israel walks, between its desire for cooperation with China and its commitment to maintaining normal relations with the US, has been stretched even further.

For several years now, the US has treated China as the most significant challenge to its foreign and security policy, and has adopted a policy that makes it difficult for its allies to cooperate with China, especially on the economic level.

Last October this thin rope was stretched twice.

The first time was caused by the expansion of the powers of the advisory committee for examining foreign investments in Israel.

This committee was established by the political-security cabinet due to American pressure, and its main goal is to create a mechanism that can limit Chinese investments in Israel.

The Cabinet approved expanding the committee's powers in two ways: first, the committee expanded the definition of "foreign investor", so that in some cases it can also be applied to a corporation of which only 5% is foreign-owned;

Second, a representative of the Ministry of Foreign Affairs was added to the committee, and this is in addition to the representatives of the Ministry of Economy, the Ministry of Defense and the Ministry of Defense, who were already members. This step strengthens the weight in the committee of interests that are not necessarily economic.

The committee was also authorized to consider not only the case of the specific foreign investor it was discussing, but also the scope of foreign investments in the industry.

The intention is clear: to limit Chinese investments in Israel and respond to American pressure.

The second development came when the US Department of Commerce published an amendment to the rules governing the export of high technology to China.

This amendment requires an American approval for the export of advanced components and technology in the semiconductor industry, the integrated circuits and the components used for the development of supercomputers.

The formal justification for the new ban is that these components can improve China's military capability, but many see these restrictions as designed to maintain American superiority in the fields of high technology.

The restrictions are relevant to Israeli companies in at least two ways: first, they are imposed on anyone who holds American citizenship or lives in the USA and is engaged in the development, sale or transfer of the controlled products; secondly, and more importantly - regarding some of the controlled products and regarding a number of Chinese companies, the Americans applied The "Foreign Direct Product Rule" (Foreign Direct Product Rule), according to which even products manufactured outside the US, but using American technology or materials, are included in the definition of the controlled product, and their export to China requires approval.

The restrictions will make the technological cooperation of Israeli companies with China more difficult, especially when the USA is considering their expansion into other fields.

These developments will not lead to the end of economic cooperation between Israel and China, but the sale of advanced technology to China and Chinese investments in Israel in the fields of infrastructure will certainly encounter many difficulties.

Dealing with them will require great attention in order not to end up in a situation of preventing Chinese investment, or worse - of standing up to the enforcement mechanisms of the US government.

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