Israel has opened an interagency review into a Chinese business deal to develop part of the strategic port of Haifa, amid U.S. security concerns.
The Port of Haifa, one of Israel’s three major international seaports, sits in the eastern Mediterranean Sea and serves both commercial and military purposes.
The port provides repair and support facilities for the U.S. Navy Sixth Fleet, which consists of about 40 ships and 175 aircraft, and hosts joint U.S.–Israeli naval exercises. The port is also home to Israel’s naval base. Its main fleets, including missile warships and submarines, are stationed there.
However, both U.S. and Israeli officials have raised security concerns about the Sino-Israeli agreement at Haifa.
Citing three unnamed sources, the Jerusalem Post reported that the review was started after unidentified U.S. defense officials privately raised concerns with their Israeli counterparts. An unidentified senior officer with the Israel Defense Forces (the country’s military) confirmed that the review is underway, according to the Post.
Citing another unnamed source, the report said several members of the Israeli inner cabinet expressed concerns that the agreement with SIPG wasn’t “properly vetted by Israel’s full national security cabinet prior to approval.”
Unlike the United States, Israel doesn’t have an agency dedicated to reviewing foreign investment deals.
U.S. Navy Commander Kyle Raines, a representative of the Sixth Fleet, told the Jerusalem Post that Navy ships visit Haifa frequently for bilateral military activities and port calls. In response to a question about China’s presence at Haifa after 2021, Raines stated: “For now, there are no changes to our operations in Israel. I can’t speculate on what might or might not occur in 2021.”
“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,” he said.
China’s presence at Haifa would allow the Chinese regime “access to sources of knowledge within the Israeli economy,” according to the MEI, which indicated that information about companies that send or receive goods through the port would be exposed to the Chinese port operator.
The MEI warned that, given well-documented cases of Chinese espionage and cyber attacks against U.S. companies, this could be a serious threat.
In another potentially troubling scenario for Israel: “Should the Chinese government, for whatever reason and at any time, decide to divert the ships that use this facility to another port, say, in Greece or Cyprus (where the Chinese already operate seaports), the Israeli economy would suffer great damage,” according to the MEI essay. Greek and Chinese media have reported that Chinese firms are interested in buying ports in Cyprus, but have yet to announce a deal.
