Israel reviews 2015 Haifa investment deal with China as Washington considers future of navy operations at port


Beijing’s US$2 billion commitment at the facility unsettles US military strategists

Political considerations concerning Chinese investment in Israel’s third-biggest port may be the reason behind the Israeli government’s decision to review a deal that gives Beijing a majority stake in the facility, analysts said.

The assessment came after Israel’s national security cabinet was reported to be revisiting a 2015 deal between the Israeli Transportation Ministry and Shanghai International Port Group (SIPG) involving the Port of Haifa.

SIPG has committed US$2 billion to the project and plans to transform the port’s bay terminal into the largest harbour in the country. The deal with the Israeli government granted SIPG control of the port for 25 years.

Pressure was exerted by Washington, since the US Navy has acknowledged that its longstanding operations in Haifa may change once SIPG takes over the civilian Haifa port in 2021, the Jerusalem Post reported on Sunday.

Haifa is Israel’s largest port city, which regularly hosts joint US-Israeli naval drills and vessels. The SIPG deal has raised intelligence and security concerns that are only now prompting an Israeli inter-agency review.

US fears of China’s involvement in the Haifa port through its “Belt and Road Initiative” have led to pressure on the Israeli government to reassess its deal with Beijing. Photo: AP

Haifa is not the only Israeli port that involves Chinese money – a subsidiary of China Harbour Engineering won a contract to build a US$876 million port at Ashdod on Israel’s Mediterranean coast.

Under Beijing’s trillion-dollar “Belt and Road Initiative” – a blueprint announced in 2013 to increase trade and connectivity in Asia, Africa, Europe and beyond – China has significantly increased its global investments, particularly in maritime infrastructure.

Pioneering Chinese companies such as Cosco Shipping Ports and China Merchants Port Holdings are on a march to acquire shares or sign deals to build terminals at seaports overseas.

Oded Eran, a senior research fellow at the Institute for National Security Studies and a veteran Israeli diplomat, said there was growing concern in many countries about the economic might of China and how that may be used in certain cases to achieve political goals.