The Beijing connection

China’s trade with Israel is valuable and the two sides want to increase it further

By YITZHAK SHICHOR
Israel and Mao China521 (photo credit: PETAR KUJUNDZIK / REUTERS)
Israel and Mao China521
(photo credit: PETAR KUJUNDZIK / REUTERS)
Economics was the focus during Prime Minister Benjamin Netanyahu’s recent trip to China, with politics very much on the sidelines, despite a “made in China” Mideast “Peace Plan.”
Usually, official visits are little more than a ritual performed every once in a while with more symbolic than any real effect. Such visits rarely herald a dramatic departure from earlier patterns of relations.
Prior to Netanyahu’s recent visit, three Israeli prime ministers had visited the People’s Republic of China (PRC) since the establishment of diplomatic relations in January 1992. Yitzhak Rabin arrived in Beijing in October 1993, and he was followed by Netanyahu, who visited China twice, briefly in August 1997 and again in May 1998. It took nearly nine years before the Chinese were willing to welcome the next Israeli prime minister.
In January, 2007, Ehud Olmert ended a three-day official visit to China. His visit indicated that Beijing was ready to forgive (yet probably not to forget) and turn a new page in Sino-Israeli relations after over six years of chill. Caused by Jerusalem’s July 2000 about-face (due to heavy pressure from Washington) on the Phalcon AWACS (Airborne Warning and Control System) sale to China – just three months after President Jiang Zemin had been assured during his historical visit to Israel that the deal was on – the chill harmed bilateral relations.
Whereas Israel’s economic transactions with China suffered only minor damage, diplomatic and political exchanges, not to mention military transfers, nearly grounded to a halt. This situation appeared to be further aggravated in 2005, when the US displayed its displeasure with Israel’s readiness to upgrade the lethal anti-radar Harpy UAVs (Unmanned Aerial Vehicles) sold earlier to China.
Olmert’s visit helped to settle accounts of the past as well as to demystify Sino- Israeli relations. The two sides have become mutually disillusioned. Beijing has finally realized that Israel, heavily dependent on the United States, can no longer supply China with military technology. Jerusalem may have finally come to the same conclusion that it could by no means defy Washington on the issue of arms transfers to China. Israel has also realized that it could hardly change China’s policy toward Iran and instinctive identification with the Palestinians. It is this mutual disillusionment – and each party’s perception of the other’s limits – that not only facilitated Netanyahu’s visit to China but also determined its nature.
Apparently, the most crucial matters were mentioned, or even discussed, perfunctorily and briefly. While Netanyahu practically avoided pestering Beijing on its support of Iran – motivated by legitimate interests that have nothing to do with Israel – the Chinese believe that Israel is irrationally obsessed with Iran and there is very little they can do about it.
The Palestine issue was much more visible. To begin with, President Xi Jinping invited Mahmoud Abbas, president of the Palestinian Authority (at almost insulting short notice) to pay a three-day state visit to Beijing while Netanyahu (invited by Prime- Minister Li Keqiang for an official five-day visit) was still there.
Some regarded it as a snub of Israel, demonstrating China’s backing of the Palestinians. Then, Beijing introduced a “Peace Plan,” which prompted others to conclude that at long last, the Chinese have decided to actively contribute to the settlement of the Arab-Israeli conflict. There were even rumors of a possible tripartite meeting in this direction. None of this actually happened and maybe was not even intended to happen.
Beijing’s “Peace Plan” is no more than a bunch of slogans. One could question to what extent China is really interested in Middle Eastern peace. True, the Chinese reiterate time and again the need for external (and internal) “stability” so as to cushion their expanding economic relations all over the world.
Yet, in some situations, “instability” also serves Chinese interests. For example, unrest in countries such as Sudan, Libya and Iraq has forced out (willingly or not) many Western companies, especially in the oil sector, ultimately enabling China to fill the gap and – in addition – offer political services as a permanent member of the United Nations Security Council and other international organizations, as well as military sales. But even if China genuinely wants peace in the Middle East, what it offered is no “plan” at all and does not reflect any willingness to become really and actively involved in the peace process. So why was the “plan” put forward, and why was Abbas invited? Maybe Beijing’s implicit answer is that the world has changed and perhaps it is fed up with these ongoing conflicts. It is time to highlight economic growth, development, innovation, science and technology, and education (all components of “comprehensive national strength” according to Beijing’s definition).
In these respects, there is no symmetry between Israel and the Palestinians. Very much like Washington, which is ultimately more important to Beijing than Tehran, Israel is more important to Beijing than the Palestinians (something that the Chinese Foreign Ministry – still essentially pro- Arab – finds hard to swallow). This was the implicit message to Abbas; his visit did attract attention, but was shallow. Netanyahu’s visit was much more substantial and concentrated mostly on developing and expanding bilateral relations, sidestepping politics. At the end of the day, this is what both countries wanted.
In absolute terms, China’s trade with Israel is nothing to write home about. Less than $9.8 billion in 2011, its share in China’s total trade turnover is less than 0.3 percent, and consists of two-thirds Chinese export and one-third imports (according to Chinese data). Yet, in relative terms, and given the fact that Israel does not export oil, China’s trade with Israel is quite significant. It is about $1 billion more than China’s trade with Egypt, whose population is over 10 times bigger than that of Israel; Turkey is also 10 times more populous than Israel, but its trade with China – defined as a “strategic partner” – is only 48 percent greater. Sudan’s trade with China, which practically controls the Sudanese oil sector, is just 15 percent bigger than Israel’s.
In short, China’s trade with Israel is valuable and the two sides want to increase it further.
In addition, Israel would like to become even more active in China and it is expected that China’s investments in Israel would also increase in a way that will tie the two economies for the long run, perhaps similar to China-US economic relations. Inevitably, such a bond has far-reaching political implications as it creates mutual dependence and commitments.
Israel could become a hotbed for innovative ideas and technologies that China might use.
Notwithstanding the blunders of the past (for which the Chinese do not blame Israel), Beijing is still interested in Israeli weapons and military technologies (which Israel is still interested in selling), and the two sides are looking for loopholes in the US objections.
Israel could also provide China with a continental bridge (such as a railway built by China) to Europe and the Mediterranean, and with an oil and gas channel (the Eilat- Ashkelon pipeline).
Turkey represents a precedent. In January 2003, shortly before Recep Tayyip Erdoğan became prime minister, he visited China, heading a delegation of businessmen that inaugurated a decade of friendship and cooperation.
Netanyahu’s visit may prove to be a similar turning point – or it may not.  Yitzhak Shichor is Professor Emeritus of Political Science and Asian Studies at the Hebrew University of Jerusalem and the University of Haifa.