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Israeli Prime Minister Benjamin Netanyahu, left, is pictured with Chinese President Xi Jinping in 2017. Analysts say Israel may rethink its relationship with Beijing in light of the Gaza war. Photo: Pool Photo via AP

Israel’s close economic ties with China worked well – until the Gaza conflict

  • Analysts point to Beijing not condemning Hamas, anti-Israel comments on Chinese social media and special envoy not visiting Israel
  • China is Israel’s second-largest trading partner behind the US but Israel’s China policy may change in light of the war

For years Israel’s economic ties with China worked well, attracting billion of dollars in Chinese investment to its hi-tech industries and infrastructure.

Then last month Hamas attacked Israel and China has not spoken out against the group.

Beijing also vetoed a US-backed proposal at the UN Security Council last month because it did not call for a ceasefire in the Israel-Gaza war, drawing criticism from Israel’s representative to the United Nations.

Analysts said the war revealed the limits of the one-time growing partnership between China and Israel. But the extent of the impact on Israel’s China policy remains to be seen.

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Humanitarian crisis unfolding in Gaza as food supplies run out after total Israeli blockade

Humanitarian crisis unfolding in Gaza as food supplies run out after total Israeli blockade

China’s lack of condemnation of Hamas, together with some anti-Israel rhetoric on Chinese social media, had made Israelis realise that China chooses sides, said Gedaliah Afterman, the head of Asia policy programme at the Abba Eban Institute for Diplomacy and Foreign Relations in Israel.

“In its actions so far, China has shown that Israel does not rank highly in its strategic calculations and that damage to its relationship with Israel is manageable collateral in the more important regional and geopolitical strategic game,” Afterman said.

“This will likely drive a shift in policy thinking as to the limits of Israel’s ability to count on China.”

The strategic priority Beijing gives Arab states over its Israeli economic partner is also reflected in a trip by China’s special envoy to the Middle East, Zhai Jun – a trip that so far has not included a visit to Israel, according to Afterman.

Zhai has visited Qatar, Egypt, Saudi Arabia, the United Arab Emirates and Jordan in the past two weeks, but skipped Israel and Palestine. The Chinese envoy repeated worries about the humanitarian crisis in Gaza and the need for a ceasefire as he met counterparts from the UN and regional partners.

Zhai also repeated China’s positions that peace talks on the basis of the “two-state solution” were the “only realistic way out” when he spoke to Waleed Al-Khuraiji, the deputy foreign minister of Saudi Arabia, according to China’s foreign ministry.

Given the “divergent position” between China and Israel on how to proceed, “I don’t think the two of them are really in a position to advance any kind of conversation”, said Guy Burton, a Brussels-based author and commentator on China-Middle East relations

While Beijing called for a peace process without concrete plans thereafter, Israel rejected the status quo and opted for force, he said.

Israeli Prime Minister Benjamin Netanyahu said on Monday his country would “stand against the forces of barbarism until victory” and would not agree to a ceasefire as it would amount to “a surrender to Hamas and terrorism”.

What is ‘the most important and urgent task for China’ in the Israel-Gaza war?

With the war coming to its fourth week, Chinese authorities “are very much shoring up their position in the wider Arab world”, Burton said.

Last Friday, China voted for a resolution in the UN General Assembly that called for “an immediate, durable and sustained humanitarian truce” in Gaza. The resolution passed.

Israel and the US were among the 14 countries that voted against the Arab-proposed resolution, according to the UN.

While Israeli Foreign Minister Eli Cohen deemed it a “despicable call for a ceasefire”, China’s foreign ministry spokesman Wang Wenbin said the resolution reflected the “strong demand of the majority of the states”, stressing that the “unfair history” of Palestine should not be allowed to be continued.

To Israel, the sudden assault by Hamas on October 7 was “a second Holocaust” but not “another round of escalation”, said Galia Lavi, deputy director of the Diane & Guilford Glazer Israel-China Policy Centre in Tel Aviv.

Lavi said the fact China’s did not condemn Hamas or mention Israeli victims and hostages led her to believe China would no longer be a relevant player in diplomacy around the war.

Israel’s China policy would also have to change, she said.

“For many years, Israel conducted economic relations with China while looking the other way when China continued its anti-Israeli position at the UN. Israeli officials hoped that as people-to-people relations tightened, China would gradually change its stance. This did not happen,” she said.

“I see no way Israel can maintain its previous level of relations with China. Things will have to change, but we don’t know how much change there will be.”

The two countries have deepened their economic ties over the past decade, notably in terms of Chinese direct investment in Israel’s advanced technology and infrastructure.

Among Chinese investments in the hi-tech sector, most funds went to life sciences, and software and information technology companies, according to the Institute for National Security Studies in Israel.

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Families plead with Israeli president for safe and immediate return of hostages held by Hamas

Families plead with Israeli president for safe and immediate return of hostages held by Hamas

Bilateral trade has also grown rapidly in the past two decades, with China being Israel’s second-largest trading partner behind the US.

Trade volume stemmed largely from Israel’s import of goods from China, which more than doubled from US$8.22 billion in 2013 to US$17.62 billion in 2022, according to the research institute.

In June, China invited Netanyahu for a state visit just as the US and Israel were at odds over issues such as Israel’s push for a judicial overhaul and a potential interim nuclear deal between Iran and the US.

Israel’s strikes on Gaza refugee camp could be war crimes, UN says

Netanyahu confirmed the visit, which was reportedly planned for last month but did not take place after the war broke out.

Analysts said China-Israel relations, as well as China’s stance on Israeli-Palestinian conflicts, were largely influenced by geopolitical dynamics and the West’s pro-Israeli stance led by the US, giving space for China to position itself from the opposite side.

Despite growing China-US tensions over the past few years, China and Israel had managed to retain a mutually beneficial economic partnership, Afterman said.

He said China still had an interest to continue economic exchanges with Israel.

“The Gaza war has brought to the surface the limitations of the China-Israel relationship and has probably restricted prospects for the establishment of a closer political partnership between the countries.”

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