Chinese Takeover of Haifa Port Could Drive U.S. Navy Away

An agreement to transfer control of Haifa port to a Chinese firm may jeopardize its standing as a friendly stopping place and point of operations for the U.S. Navy, according to a report in The Jerusalem Post.

A 2015 agreement between Israel’s Transportation Ministry and Shanghai International Port Group (SIPG), a company in which the Chinese government has a majority stake, has come under an urgent high-level review in Israel and at the Pentagon due to intelligence and security concerns.

Sources familiar with the matter said that in response to concerns raised by U.S. defense officials, the Israeli government has launched “a review of the agreement at a high level,” specifically among members of the inner cabinet.

It appeared that the full security cabinet had not fully considered the agreement and its defense ramifications before it was approved.

“You don’t want a decision that was made ostensibly for business reasons to have an impact on Israel’s relationship with the American navy,” the source said.

The agreement transfers control over the port to SIPG for 25 years. The Chinese company is investing $2 billion in the project to expand the port’s bay terminal into the largest harbor in the country.

The former head of Israel’s Mossad, Efraim Halevy, recently warned about China’s growing footprint in the Israeli economy in places where it interfaces with security.

Retired admiral Gary Roughead, ex-chief of U.S. naval operations, said that a Chinese-run Haifa port could lead the navy to take its warships elsewhere, where a potentially hostile state would not have such a closeup view.

“The Chinese port operators will be able to closely monitor U.S. ship movements, be aware of maintenance activity and could have access to equipment moving to and from repair sites and interact freely with our crews over protracted periods,” Roughead remarked during a conference last month at the University of Haifa.

The timing of the review has itself raised questions, coming as it does three years after the deal was made.

“Historically, it’s interesting to see [that] the whole awakening is now when the contract was signed in 2015; it begs the question what the hype is all about. It’s probably more conducive now because of the U.S.-China tensions over trade, national security and the like,” said Assaf Orion, a retired Israeli brigadier-general and expert on Israel-China relations now based at the Washington Institute for Near East Policy. “There is always a question of encouraging investment versus managing risk.”

“The bottom line here is that Israel will make a fatal mistake by doing either or both of the following: disregarding China’s potential to advance Israel’s economy, and doing it with our eyes shut,” Orion continued. “We must keep our eyes open, fully aware of the risk management requirements and its possible impact on the U.S.-Israel relationship.”
In the meantime, relations between Israel and the U.S. Navy remain as friendly as ever.

“Our U.S. Navy ships frequently visit Haifa, Israel, for both U.S.-Israel bilateral military activity and port calls,” Commander Kyle Raines said, when asked whether the Chinese connection might affect fleet operations in the city.

“For now, there are no changes to our operations in Israel,” the commander continued. “I can’t speculate on what might or might not occur in 2021,” when the agreement is scheduled to go into effect.