Scoop: Israel scrambles to avoid Trump blowback over Chinese investments

Israeli Prime Minister Benjamin Netanyahu and Chinese President Xi Jinping. Photo: Xinhua/Rao Ainmin via Getty Images

Officials from Israel's Foreign Ministry warned in a classified Cabinet meeting last month that if the Israeli government doesn’t create a strong monitoring mechanism on Chinese investments, it could lead to a harsh confrontation with the Trump administration, 2 ministers who attended the meeting tell me.

Why it matters: The Foreign Ministry warning, which came on July 24, led Prime Minister Benjamin Netanyahu to postpone a vote on forming such a mechanism that was apparently too weak. Chinese investments in Israel have become the main source of tension with the Trump administration over the last 2 years.

  • President Trump and other senior U.S. officials have asked Netanyahu several times to take steps to limit Chinese investments.
  • Israeli officials say the Trump administration has started showing signs of nervousness about what it sees as foot-dragging by Netanyahu on the issue.
  • In their last meeting in March, Trump warned Netanyahu that not addressing the issue could harm defense and intelligence cooperation with the U.S., according to White House officials.
  • Those officials tell me Netanyahu told Trump he understands the sensitivities, but wants to find a balanced policy that won’t harm Israel’s relationship with China.

The latest: During a visit in late June from White House national security adviser John Bolton, Netanyahu committed to passing a decision through the Cabinet on monitoring Chinese investments before Israel's Sept. 17 elections.

  • 10 days ago, Netanyahu’s national security adviser Meir Ben Shabbat presented to the Security Cabinet a draft resolution on this issue.
  • The plan was to vote on the resolution at the end of the meeting, but the Foreign Ministry raised deep reservations. They stressed that it was too weak and wouldn't address U.S. concerns.
  • For example, the draft resolution didn’t include monitoring of Chinese investment in Israel's high-tech sector — a major source of concern for the U.S., both for economic and security reasons.

Ministers who attended the meeting tell me the Foreign Ministry recommended that any monitoring mechanism on Chinese investments be tough enough that the U.S. would feel its concerns were taken into consideration.

  • They said the alternative was to risk confrontation with the Trump administration. That warning led to a postponement of the vote.

Israel's Ministry of Finance pushed back, warning that tight regulation on Chinese investments in the tech sector could harm Israeli companies and lead them to take their business abroad.

  • Netanyahu asked his national security adviser to hold another round of interagency consultations, including with Israeli Ambassador to Washington Ron Dermer, the ministers tell me.
  • An amended text could be brought to the Cabinet as soon as Wednesday.

The other side: A White House official told me, "We hope the Israelis will take steps to address our concerns about China — including passing a resolution in the Cabinet on monitoring Chinese investments."

Additional Stories

Nigel Farage says Brexit extension would be better than Boris Johnson's deal

Photo: Peter Summers/Getty Images

Brexit Party leader Nigel Farage told Sky News on Sunday that he'd prefer to extend the Brexit deadline past Oct. 31 in order to hold a general election than see Parliament pass the divorce deal struck by the EU and Prime Minister Boris Johnson last week.

"This is a rotten deal. ... I do understand because of Brexit fatigue and anger in the country the temptation to vote for it. But it is nothing more than Brexit in name only, it will not solve anything. This will not end things."

Global pork prices soar as swine fever infects herds in eastern Asia

South Korean quarantine officials block people from entering an infected area. Photo: Jung Yeon-je/AFP/Getty Images

African swine fever, a deadly pig disease, is killing hundreds of millions of hogs in eastern Asian countries, causing a global surge in pork and bacon prices, according to Bloomberg.

Why it matters: African swine fever is not known to infect or harm humans, but it can kill most pigs in a week and has the potential to disrupt pork markets and threaten food-insecure countries.

Hong Kong protestors march in support of pro-democracy leader

Pro-democracy protestors in the Tsim Sha Tsui district in Hong Kong, Oct. 20. Photo: Dale De La Rey/AFP via Getty Images

Tens of thousands of pro-democracy protesters marched in Hong Kong on Sunday in defiance of a police ban against assembly, rallying in support of a pro-democracy group leader who was attacked by five men wielding hammers three days earlier, according to the BBC.

The state of play: Though the march was largely peaceful, some protestors threw firebombs at police and vandalized Chinese banks and shops. Police responded by shooting tear gas canisters and deploying water cannons loaded with a blue irritant used to mark protestors for later arrest.

Read more at Axios
© Copyright Axios 2019