Israel-China economic diplomacy: The limits following the Hamas attack on Israel - opinion

Beijing is hopeful that once peace is restored in the region, Israel will go back to business as usual with China.

 CHINESE FOREIGN MINISTER Wang Yi speaks with Mousa Abu Marzouk (right) – the head of Hamas’s international relations office based in Qatar – and Mahmoud al-Aloul, vice chairman of the Fatah Central Committee, in Beijing last year.  (photo credit: Pedro Pardo/Reuters)
CHINESE FOREIGN MINISTER Wang Yi speaks with Mousa Abu Marzouk (right) – the head of Hamas’s international relations office based in Qatar – and Mahmoud al-Aloul, vice chairman of the Fatah Central Committee, in Beijing last year.
(photo credit: Pedro Pardo/Reuters)

China’s diplomatic approach toward the ongoing Israel-Hamas War has jeopardized its once-strong relationship with the Jewish state.

In 1950, Israel became the first country in the Middle East to officially recognize the People’s Republic of China. The two countries had already established representative offices in Beijing and Tel Aviv that served as de facto embassies prior to the official establishment of diplomatic relations in January 1992. After emerging from the shadows, their relationship developed gradually.

Jerusalem and Beijing have strong economic ties, proven by trade figures. China is now Israel’s second-largest trading partner after the United States and its largest trading partner in the goods and commodities category. It is important to highlight that trade relations between Israel and China are focused primarily on goods with almost negligible trade in services.

Overall, trade with China constitutes around 12% of Israel’s international commerce in goods in 2023. However, the Jewish state’s imports from the PRC outweigh its exports, resulting in a significant trade imbalance.

Chinese imports have doubled between 2013 and 2022, from $5.6 billion in 2013 to $13.1b. in 2022. Even though in 2023, imports from China registered a decrease of 15% from a peak of $13.1b. in 2022 to $11.2b., imports rose steely by almost 20% a year later, touching $13.53b.

 China's President Xi Jinping attends the ''Senior Chinese Leader Event'' held by the National Committee on US-China Relations and the US-China Business Council on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, California, U.S., November 15, 2023 (credit: REUTERS/CARLOS BARRIA)
China's President Xi Jinping attends the ''Senior Chinese Leader Event'' held by the National Committee on US-China Relations and the US-China Business Council on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, California, U.S., November 15, 2023 (credit: REUTERS/CARLOS BARRIA)

Meanwhile, Israeli exports to the PRC, dominated by electronic components, have been stagnating for years. After peaking at $4.77b. in 2018, exports to China stood at $3.4b. in 2023, a drop of 27.7%.

Investment in Israel 

Chinese investment in Israel also rose dramatically between 2010 and 2020, predominantly in the technology sector. In 2015, the China-Israel Joint Committee for Innovation Cooperation was formed to institutionalize this collaboration. Between 2012 and 2017, at least 30 new Chinese investors entered the Israeli market.

Despite Washington’s discomfort and apprehensions, Chinese industry behemoths like Xiaomi, Lenovo, ChemChina, and Alibaba established their footprints in Israel, mainly in artificial intelligence, semiconductors, and communication networks. Israel-China ties peaked during this decade, with Prime Minister Benjamin Netanyahu in 2017 calling the relationship a “marriage made in heaven.”

However, the October 7, 2023, attack by Hamas came as a major setback to China-Israel ties. Even though the PRC publicly tried to portray an impartial and neutral position, it had essentially sided with Hamas.

On October 8, one day after the attack, the Chinese Foreign Ministry urged the international community to “step up input into the Palestinian question [and] facilitate the early resumption of peace talks between Palestine and Israel.” Beijing did not issue any statement to question or condemn Hamas’s actions on October 7 despite its own public campaigns against domestic Islamist terrorism.


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On October 11, China’s special envoy to the Middle East, Zhai Jun, spoke to Palestinian Authority Foreign Ministry officials, expressing concern over the “deterioration of the security and humanitarian situation in Palestine.” This was followed by a phone call to Israel’s Foreign Ministry on October 12, calling for “an early ceasefire and the end of violence” based on a two-state solution.

Subsequently, the Chinese officials, as well as (state-controlled) media, continued to project a clearly pro-Palestinian position. Interestingly, in late October, Israel signed a joint statement with 50 other countries, including the US and UK, to condemn human rights violations by the PRC against Uighur Muslims in the Xinjiang region – a move that may have further infuriated Beijing.

Addressing the International Court of Justice in The Hague in February 2024, Ma Xinmin, legal adviser to China’s Foreign Ministry, called Israel a “foreign power occupying Palestine” while justifying the use of force by Palestinians as “an inalienable right well-founded in international law.” On April 30, 2024, Beijing even hosted a Hamas delegation led by its head of international relations, Mousa Abu Marzouk.

This meeting was scheduled two weeks after a high-level Israeli delegation led by President Isaac Herzog visited Taiwan to meet President Tsai Ing-wen to discuss matters of mutual interest ranging from trade to terrorism.

In July, Beijing again hosted representatives from 14 Palestinian factions and mediated talks between rival groups – Hamas and Fatah – who agreed to form a unity government in post-war Gaza. Both sides have been hitting each other where it hurts the most.

Disappointed by America’s unconditional support for Israel, the Palestinian people and leadership have welcomed Beijing’s public display of affection. The Palestinian envoy to the UN has praised China as “a true friend ready to do everything they can to help the Palestinian people.”

However, Chinese solidarity with Palestinians is neither ethical nor ideological. Beijing’s institutional repression and mass detention of Uyghur Muslims is no secret. Such a regime cannot be trusted to support the Palestinian cause without any quid-pro-quo.

Palestinians will eventually realize that China is a fair-weather, opportunistic friend that exploits emotions and sentiments to further its agenda. Beijing’s current pro-Palestinian rhetoric is a strategic move to boost its image and establish itself as a more ethical and just alternative to the US while securing its geo-economic interests in the region.

The Middle East – especially the Gulf Cooperation Council countries – is crucial for China’s energy security, aside from its Belt and Road Initiative. Additionally, approximately 15% of China’s oil imports comes from Iran, which is a very crucial part of Beijing’s anti-West strategy.

For years, China has successfully nurtured strong economic ties with adversarial parties – Arab states, Israel, and Iran – and exploited the fault lines to its advantage. However, this time, China’s diplomatic game has gone too far.

Beijing is hopeful that once peace is restored in the region, Israel will go back to business as usual with China. The important question is, for how long will Israel continue to ignore China’s diplomatic trickery and let it get away without consequences?

The writer is a senior visiting fellow with the Centre for National Security Studies, Bangalore. She holds a PhD from Jawaharlal Nehru University, New Delhi, and has worked with India’s National Security Council’s Advisory Board as a researcher.