Chinese companies warn cutting projects hurts ties

Reducing Chinese companies’ involvement in infrastructure projects can hurt Israel’s diplomatic and economic interests, Lawyers for the Chinese Enterprises Association in Israel (CEAI) said, responding to an antitrust suit in the Supreme Court, in a document obtained by The Jerusalem Post on Thursday.

CEAI is a group of major Chinese businesses working in Israel in several fields. The Israel Builders Association petitioned the High Court in May, accusing Chinese construction and engineering companies of behaving like a monopoly.

Citing bilateral agreements between the country and calling for the Prime Minister’s Office, National Security Council and Foreign Ministry to get involved, CEAI said “Israel’s diplomatic and economic interests can be severely harmed by this discussion.”

CEAI argued that strong Sino-Israeli economic relations – with annual trade over $13 billion – lean on diplomatic relations developed since 1992.

“The ramifications of accepting the petitioners’ stance in relation to the Law for Promoting Competition and Reducing Market Concentration are mega-global, politically

and diplomatically,” CEAI’s response reads. “They go beyond the Israeli market into the world geopolitical plane and are expected to change Israel’s status in the international arena and influence its foreign relations.”

CEAI’s attorneys brought up past court cases in Israel involving Israeli spy Jonathan Pollard and others to show that there is a precedent by which judges decline to intervene in cases that can harm Israel’s foreign relations.

CEAI members are all owned, directly or indirectly, by the Chinese government, and are able to offer much lower prices for their services than Israeli companies.

The Chinese companies’ warning comes at a time that the US has been urging Israel and other allies to reduce economic ties with Beijing, especially in critical infrastructure projects that can be used to gather intelligence or to inflict major economic, social and environmental losses, and even casualties, by damaging that infrastructure.

On Wednesday, Communications Minister Yoaz Hendel said that he sees “eye-to-eye” with the US in response to a question about the risks to Israel if Chinese companies build its 5G Internet networks. In May, amid major pressures from the Trump administration, Israel selected a local company, IDE Technologies, rather than Chinese firm Hutchison, to construct Sorek 2, the world’s largest desalination plant.

Three of the six international groups bidding to build two lines of the Tel Aviv light rail are Chinese state-owned companies, most of which also worked on railway projects in Iran, which could be a security concern.

The Israel Builders Association argues that the CEAI should be treated as a “concentration group” under Israeli antitrust law. They also sued the Committee for Reducing Market Concentration and the Competition Commissioner.

The builders argued that the Chinese companies are taking advantage of a lacuna in the law by appearing to be separate entities, but are actually coordinating with one another under the auspices of the Chinese government.

Should the court accept the builders’ argument, their activities could be limited and they could be ineligible for government tenders in Israel. •