Can China-Operated Port Project in Israel Boost Beijing Position in Middle East and Anger US?

China’s state-owned Shanghai International Port Group (SIPG) grabbed the Haifa port contract in 2015 which allows it to operate the commercial shipping facility for 25 years. However, the project was delayed after serious objections raised by the US Navy relating to the agreement.

Israel has officially opened a new port terminal in Haifa — the country’s busiest shipping hub — which will allow large shipping vessels of about 400m length and carrying about 18,000 containers each to dock at the port. The opening of the port, operated by the Chinese firm, has further deepened the security concerns of the US as its navy sometimes docks its maritime assets in Haifa.

“For Israel, this project will not only create resentment with the US, but it will also raise questions about the broader shape Israel's foreign policy has been taking. Already, some reports in Israeli media indicate that the exact terms of the agreement haven't been clear until now. Although Israel wants the US to believe this is a commercial contract, the reality is that the dimensions are strategic and military too,” Commodore Seshadri Vasan, former Indian navy officer and director of the Chennai Centre for China Studies told Sputnik.

The development is of great importance where smoothing Israel’s relations with the UAE and Bahrain is concerned. Transportation Minister Merav Michaeli, in a statement, said that the terminal is an opportunity to “strengthen our regional capabilities in maritime trade” and leverage it “not only for local prosperity, but for the realisation of opportunities and a genuine contribution to our neighbors in the Middle East.”

But Vasan added: "The Belt and Road Initiative (BRI) is marching ahead full steam. The port of Haifa could play a crucial role in coming years for extending Chinese ambitions into the Middle East. China is investing not only in Israel but in other Middle East nations in a big way, as well as the neighbouring mediterranean region."

Earlier this year, it was reported that Tel Aviv had declined the US request to inspect the terminal as the Pentagon levelled criticism against Israel because of China’s participation in the $1.7 billion project.

The National Defense Authorization Act 2020 had mentioned that the Chinese presence will harm US interests in the “future forward presence of United States naval vessels at the Port of Haifa in Israel”. Washington had urged “the Government of Israel to consider the security implications of foreign investment in Israel.”

"We must note that Israel has already been exporting defence equipment to China and has been strengthening its ties," Vasan concluded.

Israel will inaugurate another China-funded port on the Mediterranean coast later this year which is being constructed at an approximate investment of $930 million.