Gov’t to Establish Committee to Review Foreign Investments

YERUSHALAYIM -
Chinese President Xi Jinping and Israeli Prime Minister Benjamin Netanyahu shake hands ahead of their talks at Diaoyutai State Guesthouse in Beijing, in 2017. (Reuters/Etienne Oliveau/Pool)

The Cabinet has established a new committee that will vet all foreign investments in Israel. The decision to establish the committee came after a visit to Israel by U.S. Treasury Secretary Steve Mnuchin. Media reports said that the U.S. had pushed for the committee to be established in order to temper investments by China in Israel.

The committee’s members will include Finance Ministry, Defense Ministry, and National Security officials, as well as observers from the Foreign and Economy Ministries. Regulators will ask the committee to vet investments on a voluntary basis, and will only discuss investments that require government clearance.

With the move, Israel joins a long list of countries, including the U.S., Canada, Britain, Germany, Australia and others that are more closely looking at foreign investments in order to ensure that key infrastructure or industries do not fall under the control of foreign investors or governments.

In Israel, it is expected that the committee will discuss major projects such as a major investment China intends to make in Haifa Port, the construction of a railway to Eilat by Chinese investors, and others.

In Israel, China has invested in numerous projects, perhaps most famously in the Tel Aviv subway system. Among projects Chinese companies hope to be a part of in the future is the refurbishing of Haifa Port.

The investments are part of China’s Belt and Road program, which has seen it investing in 152 countries around the world. According to Foreign Policy, some 63% of the world’s population has been directly impacted by these investments.

Over the past five years, China had invested $123.1 billion in projects in the Middle East, 75% of it in the past three years. Besides Israel, China has been investing in Kuwait ($10.43 billion over the past decade) and Qatar ($7.27 billion). Much of the Middle East investment is now being funneled to Egypt, where Chinese companies are working on two major projects – improvement to the Suez Canal, and the construction of new government quarters, as requested by Egyptian President el-Sisi.

According to Foreign Policy, China’s interest in the Middle East is the same as everyone else’s – energy. Dependent as it is on imported oil, Beijing has been developing relationships with a host of countries that export oil and gas, and Israel is in that latter category now. The report said that China is hoping to develop long-term deals with energy exporters that will enable it to buy energy at a discount.