Israel Looks East for Allies and Customers

Trade Diplomacy ▶ Netanyahu is courting the Chinese, the Russians, and others ▶ “You want to go where the growth is”

Criticized by U.S. and European leaders over his policies toward the Palestinians, Israeli Prime Minister Benjamin Netanyahu is cultivating allies in other parts of the world.

His government started free-trade talks with China in March, is negotiatingg favored-nation statusus with Japan, and in lateate April hosted Singaporeore Prime Minister Lee Hsien Loong on his first visit sit to Israel. The four-time Israeli premier is planning a summer tour of Africa. He told his cabinet, reporters, and U.S. Jewish leaders that even Sunni Arab countries are drawing closer to Israel over shared fears of Iran. He also cultivated ties with Russian President Vladimir Putin, visiting Moscow on April 21 to discuss common military concerns in Syria.

Those close to Netanyahu say tectonic shifts—no superpower in charge, Iran rising, the Middle East imploding, the still-potent Chinese economic engine—have convinced him Israel must develop new alliances.

“Over the longer term, there are problems for Israel in its relations with western Europe and with the U.S.,” says Mark Heller, principal research associate at Tel Aviv’s Institute for National Security Studies. In contrast, “relations with many important Asian countries don’t seem to indicate much interest about how Israel gets along with the Palestinians, Arabs, or anyone else.”

Opponents of Netanyahu and his party say Israel’s success attracting investment from Silicon Valley and Asian tycoons such as Li Ka-shing has helped him absorb the blow of U.S. and European criticism of his settlement policies. The premier “says to himself: ‘Nobody’s punishing me, so why should I behave differently than I really want?’ ” says Yossi Beilin, architect of the 1993 peace accords with the Palestinians and a former leader of the left-wing Meretz party.

The U.S. remains by far Israel’s most vital ally, giving $3.1 billion in annual aid. The European Union is its primary trading partner. Israel’s exports to the U.S. and Europe have fallen since the global financial crisis, while exports to Asia rose to $17.7 billion in 2015, from $12.2 billion in 2008. Exports to China rose to $3.2 billion from $1.3 billion during that period. “You want to go where the growth is,” says Eli Groner, director- general of Netanyahu’s office.

Israel wants these trading partners to lend it more political support. “Many other countries want to learn about our technology, water desalination,