Abraham Accords: Reducing China's Middle East Influence
As published in Newsmax.
February 18, 2021.
The signing of the Abraham Accords between Israel, the UAE and Bahrain was heralded as a historic breakthrough promoting economic, technological, scientific and cultural ties between former enemies, building a strong coalition to confront Iran and debunking the conventional wisdom that peace between Israel and her Arab neighbors would only come after the Palestinian conflict with Israel was resolved.
Like a gift that keeps on giving, are the Abraham Accords also poised to weaken Beijing's considerable influence in the region, especially in Israel?
Chinese President Xi Jinping envisions a future in which China replaces the United States as the dominant world power. Beijing's Belt and Road Initiative (BRI), a $1 trillion program to invest in and acquire infrastructure projects in more than 100 countries around the world, and its Made in China 2025 initiative to make the country the undisputed leader in global hi-tech, are both designed to further this ambition.
China is Israel's second-largest trading partner and source of foreign investment after the United States. Sino-Israeli trade in 2018 was over $15 billion, more than 40 times greater than 23 years earlier. Chinese investment in Israeli hi-tech doubled to $1 billion from 2014 to 2016. Chinese venture capital investments in Israeli startups more than quadrupled from 2013 to 2018.
China's investments are strategic, focused on artificial intelligence, biotechnology, robotics, machine learning, quantum and edge computing, and big data — technologies that are essential to China's military modernization efforts. In 2017, President Xi and Israeli Prime Minister Benjamin Netanyahu announced the Innovative Comprehensive Partnership to foster cooperation and exchanges of technological personnel. With Beijing accounting for 10%-15% of Israel's economy, it holds considerable leverage over the Jewish state.
The Trump administration warned Israel about allowing China's involvement in critical projects such as the Haifa and Ashdod ports and Tel Aviv's subway system, while also raising concerns about the danger of Chinese espionage and theft of technical expertise. As a result, the Israeli government rejected China's bid to build the country's largest desalination plant and is expected to decline Huawei's bid on a 5G network.
Then-Secretary of State Mike Pompeo said, "We don't want the Chinese Communist Party to have access to Israeli infrastructure, Israeli communication networks, things that endanger the Israeli people and the ability of the U.S. to cooperate with Israel."
The U.S. shares a vast quantity of sensitive information with Israel and is rightly concerned with Chinese espionage and intellectual property theft. Israeli security experts share this fear, especially now that Beijing plans to invest hundreds of billions in infrastructure projects in Iran, Israel's mortal enemy, and also coordinate on intelligence and weapons development with Tehran.
The Abraham Accords give Israelis new options to reduce their dependency on China.
The world's fourth largest port operator, UAE-based DP World together with Israel's Dover Tower are preparing a joint bid to operate the important Port of Haifa, exclusive of the new container terminal operated by the Shanghai International Port Group.
It is estimated that $1 billion in investments between Israel and the UAE were made in the last two months of 2020. In October, the Trump administration, Israel and the UAE announced the creation of the Abraham Fund which is planning to invest as much as $3 billion in various private sector projects. The fund is already financing an Israeli company constructing an oil pipeline from the UAE to Europe.
The UAE's Masdar, wholly owned by the Mubadala Investment Fund, one of the largest in the world, recently announced its first investment in Israeli renewable energy. Although Saudi Arabia has not as yet joined the Accords, its Crown Prince views Israeli technologies as useful for the economic transformation of his country.
Previously, Middle Eastern countries traded heavily with China, but very little among themselves. The Abraham Accords will help to reverse this imbalance, with Israel and the UAE, among the region's top three sources and destinations for foreign investment (Saudi Arabia being the third) offering each other an alternative to Chinese capital.
Asked whether discouraging Israel from relying on Chinese investments was a consideration in the Abraham Fund's founding, a State Department source said, "Reducing dependence on the Chinese Communist Party is a good thing."
According to CENTCOM commander Gen. Kenneth F. McKenzie Jr., the Abraham Accords will likely facilitate a long-term U.S. ambition — "a collective approach to security" in which the countries in the region can increasingly ensure their own security and stability. This would allow the U.S. to shift forces to other theaters while preserving its regional influence. An America perpetually bogged down in the Middle East works to China's advantage.
Will the Biden administration recognize the important opportunities the Abraham Accords offer to thwart China's Middle East initiative? Will it understand the strategic value of the Israel-Sunni alliance? We don't know, but their initial actions aren't encouraging.
The reinstatement of a 10% aluminum tariff on imports from the UAE, one of the largest aluminum producers in the world, and their suspension and "review" of the previously approved sale of F-35 aircraft to the Emiratis are guaranteed to raise concerns about the reliability of any alliance with America.
The U.S. refusing to support offensive operations in Yemen where the UAE is part of the Saudi-led coalition fighting the Iran-backed Houthis, the revoking of the Houthis' terrorist designation, along with the pause of a Saudi Arabia munitions sale, and mixed messages on the Iran nuclear deal, all endanger the agreement.
The Biden administration would be wise to build on the opportunities to strengthen and expand the Israel-Sunni alliance — Morocco and Sudan have recently joined the Accords and Saudi Arabia is likely to join soon — and use the strategic gains from the Abraham Accords to check the power of China and Iran in this critically important region.
Peace between Israel and her Arab neighbors is a win-win, both for the U.S. and for the Middle East. As the saying goes: "Don't look a gift horse in the mouth," especially if it has Chinese teeth.