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The U.S. has raised concerns about Chinese investment in the Port of Haifa project. Photo: Emmanuel Dunand/AFP via Getty

While visiting Israel last week, CIA director Bill Burns told Prime Minister Naftali Bennett the U.S. was concerned about Chinese investments in Israel, particularly in the tech sector, and involvement in major infrastructure projects, Israeli officials tell Axios.

Why it matters: That's the highest level at which the Biden administration has raised an issue that previously became a rare point of contention between the Trump and Netanyahu governments.

  • The Trump administration had warned that further Chinese involvement in big infrastructure projects, like the new port in Haifa, could damage the U.S.-Israel security relationship.
  • But the Netanyahu government had made a priority of deepening ties with China and dragged its feet on the issue, despite pledging to change course.

Bennett told Burns that Israel understands the U.S. concerns and shares some of them.

  • As an example, he mentioned recent press reports about a wide-ranging Chinese cyberattack against Israeli tech companies two years ago, Israeli officials said.

What they're saying: "In recent months, we started a dialogue with the Biden administration on China. The U.S. asked about specific projects like the Chinese involvement in the Tel Aviv metro. We told the Americans we welcome U.S. infrastructure companies to work on big projects in Israel but they don’t apply to the tenders," a senior Israeli official told me.

  • Meanwhile, at a Senate hearing last week, State Department and Pentagon officials said the Biden administration had warned its partners in the Middle East that China wasn't interested in their security needs or in regional stability and that further Chinese involvement could eventually compromise their sovereignty and security relationships with the U.S.
  • “We know our partners and allies in the Middle East have trade relations with China and that’s OK, … but we made it clear that there is a certain kind of cooperation with China we cannot live with," said the State Department's Mira Resnick.

What’s next: Israeli officials expect more talks on this issue in the coming months between the Israeli National Security Council, which is coordinating policy on China, and the White House.

Go deeper

Oct 26, 2021 - World

How unheeded warnings about China are now hurting Chinese Canadians

Illustration: Sarah Grillo/Axios

For years Canadian officials prioritized trade with China and ignored warnings from Chinese Canadians that the Chinese government presented a serious political and moral challenge, a Canadian journalist argues in a new book.

Why it matters: An earlier response by democratic governments could have relieved the pressure on Chinese diaspora communities and sent a strong message to Beijing that exporting authoritarianism wouldn't be tolerated.

Oct 26, 2021 - World

Ted Cruz will lift his confirmation blockade for Biden’s ambassador to China

Photo: Anna Moneymaker/Getty Images

Sen. Ted Cruz (R-Texas) does not plan on stalling the confirmation of President Biden's ambassador to China, Nicholas Burns, as he has done with dozens of other State Department nominees, according to a source familiar with the decision.

Why it matters: Burns, a former career diplomat widely viewed as one of Biden's most qualified nominees, will be tasked with managing the president's defining foreign-policy challenge: preventing "intense competition" with China from spiraling into outright conflict.

Oct 26, 2021 - Technology

FCC votes to halt China Telecom operations in U.S.

A meeting room in the Federal Communications Commission headquarters. Photo: Andrew Harrer/Bloomberg via Getty Images

The Federal Communications Commission voted Tuesday to revoke authorization for China Telecom's U.S. subsidiary to operate in America, citing national security concerns.

Why it matters: The state-owned China Telecom is one of the largest telecommunications companies based in China. It has provided services in the U.S. for nearly 20 years but must now cease operations within 60 days.

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