The U.S. Is Worried About China’s Investments. This Time in Israel.

U.S. national security officials have for years warned developing nations about the dangers of allowing Chinese investments in their countries. But now the Defense Department is worried about China’s investments in one of America’s closest allies, specifically Israel. China’s ultimate aim, defense officials fear, is the same as the one it has pursued in Africa and East Asia, and elsewhere: to chip away at America’s influence.

For the U.S., a Chinese incursion in Israel, which cooperates with Washington on some of the most sensitive national security issues—including Iran’s regional activities and the ongoing fight against ISIS—is especially concerning.

China’s economic campaign is underway as it builds up its military across the board. Beijing is for the first time in the modern era beginning to project its military power outside of its own region—most notably building its first-ever overseas base in Djibouti, on the Horn of Africa and adjacent to one of the world’s most important oil transit chokepoints through the Bab al-Mandab Strait. That base also happens to sit cheek by jowl with a U.S. base of about 4,000 people, which is a key hub in the U.S. drone wars in Somalia and Yemen.

“While we are not asking Israel to avoid dealing with China entirely, we have open discussions with all our closest allies and partners on the national security implications of Chinese investment,” said Michael Mulroy, the deputy assistant secretary of defense for the Middle East, in a written statement to The Atlantic.

[Read: China’s risky Middle East bet]

Mulroy noted that within three years, a Chinese state-owned company is expected to operate part of the Haifa port, a frequent port of call for the U.S. Navy’s Sixth Fleet and which is near an Israeli naval base where nuclear submarines are reportedly stationed. China’s investment in the port prompted a rare objection from the U.S. Navy to Israeli counterparts when it was first disclosed last year. As Amos Harel, a correspondent for the Israeli newspaper Haaretz, noted in the paper, “China is acquiring vast influence over essential infrastructures in Israel and, indirectly, also a closer look at some of Israel’s military capabilities.”

“The Department of Defense is concerned about China’s desire to erode U.S. military advantages, as well as China’s push for access and basing, use of economics to intimidate through the One Belt One Road initiative”—a worldwide campaign of infrastructure investments—”and technology and intellectual property theft, acquisition and penetration,” Mulroy’s statement said. (The Israeli embassy did not immediately respond to a request for comment.)

Why worry? As Undersecretary of Defense for Policy John Rood put it on a recent visit to Israel: “China wants to own the road, and wants to control the belt.”

But U.S. defense officials’ concern is not just about China’s physical access to a sensitive region where the U.S. has for decades been the dominant outside power. It’s also that certain commercial deals, particularly in the technology sector, could be a backdoor to Chinese spying in sensitive national-security realms. “The openness of the U.S. and Israeli economies is a strength for our countries, but malign actors can take advantage of that if we are not cautious,” Mulroy said.

[Read: Africa is the new front in the U.S.-China influence war]

The U.S. has raised similar issues, including with the British, whom President Donald Trump is prodding not to partner with the Chinese company Huawei to build next-generation telecommunications networks known as 5G. (The U.S., meanwhile, has taken its own measures against the company, sharply restricting its sales in the U.S. while citing fears for national security.) One problem with that, from the U.S. perspective: America and Britain are very close intelligence partners, and the U.S. doesn’t want to effectively be sharing intelligence with the Chinese. The intelligence-sharing issue is also a sensitive one in Israel’s case. The allies coordinate closely on a range of regional security issues, including the ongoing counter-ISIS fight in Syria and trying to contain Iran’s activities in the region. China, however, also maintains close ties to Iran.

And elsewhere in the Middle East. It is perhaps to China’s advantage that it has adopted an agnostic posture on some of the major disputes roiling the region, especially the enmity between Iran and Israel as well as many Gulf countries as well. Where there are U.S. interests in the region, these days there are also often Chinese investments. China has launched major industrial investments in the United Arab Emirates, another wealthy ally of the United States, which has backed the U.S. pressure campaign against Iran and which defense officials characterize as its most capable military partner in the Gulf. Beijing has invested in energy projects and railroads in Egypt and ports and car plants in Tunisia. It’s also getting involved in Syrian reconstruction and in the Iraqi oil sector.

As Mulroy took care to emphasize, there’s nothing inherently wrong with Chinese investments, which aren’t necessarily destined to strain ties among allies. Nor are Israeli officials blind to the risks—from either Washington’s perspective or their own. A 2019 Rand Corporation report says that current and former Israeli parliamentarians had noted a variety of problems including “China’s cyber espionage record; corruption allegations; the links between Chinese companies and China’s government; and the issue of having a foreign entity control major infrastructure, including infrastructure that might be integral to Israeli security.”

Yet the investments continue, and despite U.S. concerns, the ultimate effect on U.S.-Israeli ties that both sides tout as unshakeable may be muted. “While some of the recent U.S. rhetoric about Chinese investment generally in Israel and ramifications for U.S.-Israel defense and intel ties strike me as overblown and likely to be exposed as hollow threats, I do think there is reason to be concerned about China managing a major port of call for the 6th fleet,” a former U.S. official who requested anonymity to discuss the issue told me. This person noted that China’s presence at Haifa was less a concern than its Djibouti base. “But our closest friend in the region allowing Chinese management of a regular [U.S. Navy] port of call would definitely be a bitter pill.”

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