Israel refuses Chinese bids on desal, 5G projects


Under the backdrop of US-Chinese tension and a growing wariness of Beijing’s intentions, Israel Chose a local company in rejecting a bid from a Chinese-owned company this week on a major Israeli infrastructure project, while the Israeli Defence Ministry has also reportedly recommended Chinese-linked firms will not be selected  for a role in the construction of Israel’s 5G communications network for reasons of national security.

On May 26, the Israeli government announced it was awarding a contract to build what will be the country’s – and the world’s –  largest desalination plant to a local firm, passing over other offers, including from a Chinese company, the Hong-Kong based Hutchison Company.

Meanwhile, Israel’s Channel 12 reported on May 27 that the Defence Ministry had urged that any companies with Chinese ties be excluded from the roll-out of next generation 5G wireless communications in Israel.

According to the report, while no Chinese firms have bid on 5G projects in Israel yet, though the recommendation may again be aimed at excluding Hong Kong-based Hutchison, which on paper has a controlling 30 percent stake in the Israeli mobile communications provider Partner (though its shares are currently held by a trustee for  national security reasons, and that will not change without the consent of the Ministry of Defence.)  Israel had already made it clear earlier that Huawei, the most controversial and best-known Chinese company involved in 5G technology, would not be allowed to participate in building Israel’s network.

Israel’s distancing from China comes after rethinking  in recent times about the relationship and a visit by US Secretary of State Mike Pompeo on May 13, where US concerns about China were reportedly among the topics discussed.

Israel has previously contracted Chinese companies to help build infrastructure projects such as the Tel Aviv light rail, and the Carmel tunnels near Haifa, and to expand and help operate the ports of Ashdod and Haifa.

In related news, The Diplomat, a website devoted to matters of international diplomacy involving the Asia-Pacific region, interviewed Dr. Yoram Evron, Senior Lecturer in the Department of Asian Studies at the University of Haifa on May 27 about the Israeli government’s ongoing shift in attitudes towards China.

Dr Evron told the website that while in the past Israel may have been quick to enter contracts with Chinese interests on grounds of cost-effectiveness, that consideration is now placed third behind security and political priorities.