Israel’s military ties with China—especially the upgrading of Harpy surveillance aircraft—are undermining the Jewish state’s security. The dispute goes beyond friendly and short-lived differences of opinion. Rather, the diplomatic row represents a clash of strategic outlooks that can have lasting consequences. Middle Eastern states, for example, may perceive Washington’s public unhappiness over the Harpy deal and U.S. restrictions on future Israeli military dealings as a sign of wavering support for a country perceived by many to be Washington’s chief ally in the region. For many states with strained or adversarial ties with Washington, Israel’s diplomatic importance was as a symbolic gatekeeper to Washington. They perceived the development of relations with the Jewish state as a way to win them goodwill in the White House. But U.S. anger over Sino-Israeli military ties has undercut such a perception.

This dispute over China has its roots in the disintegration of the Soviet Union and the end of the Cold War. The ramifications of the Soviet collapse upon Israel were vast. The disappearance of their Cold War patron encouraged both the Syrian government and proxies for the Palestine Liberation Organization to participate in the 1991 Madrid conference to discuss a negotiated settlement to the Arab-Israeli conflict. The onset of the Oslo process in 1993 coincided with the slow collapse of the Arab political and economic boycott. Jordan signed a peace treaty with Israel in 1994, and Arab states such as Morocco, Oman, Qatar, and Tunisia exchanged low-level delegations with Israel. Indeed, between the Madrid conference and the Oslo accords, twenty-one countries renewed or established diplomatic relations with Israel. Following the signing of the Oslo accords as many as thirty-six states took similar steps.[1] But, the erosion of Israel’s isolation did not just extend to moderate Arab states and African and former East Bloc nations. The end of the Cold War enabled Asian powerhouses such as India and China to abandon their hostility and normalize relations with Israel. While Israeli officials may have embraced their new international normality, Israel’s foreign policy establishment paid scant attention to another major development: rising U.S. concern about China and its ambitions.

During the Cold War, Washington was indifferent to the Israeli government’s use of its military industries to court Beijing. Long before the January 1992 commencement of Sino-Israeli diplomatic ties, Israel forged military ties with China. The Israeli government enabled Beijing to circumvent U.S. and European military sanctions imposed following the 1989 Tiananmen Square crackdown. Most experts agree that arms sales and other military transactions lessened Chinese opposition toward Israel, led to a mitigation of hostile rhetoric, and eventually paved the way for normalization of relations.[2]

But with the collapse of the Soviet Union, Washington no longer needed Beijing as a counterweight to Moscow and began to perceive China as a threat to its strategic interests in the Asia-Pacific region. Rapid economic growth made China an emerging global player. China, especially a militarily strong and resurgent one, became an obsession to many U.S. leaders and groups. Official reports began to visualize China as the new threat.[3] Concern over a resurgent China has influenced U.S. policy development toward vulnerable Japan, ambition-driven India, and weakened Russia.

The U.S. security commitment to Taiwan also shaped Washington’s China policy. The United States is obligated to protect the island republic from Chinese attack.[4] Periodic belligerence toward Taipei by Beijing authorities has reinforced U.S. concerns. During the Taiwan Strait crisis in 1995-96, the United States, for the first time since Sino-U.S. normalization, dispatched a large armada to the region to express its support for beleaguered Taiwan. From an official U.S. viewpoint, China had to be contained, not strengthened.

Israeli officials, though, failed to read Washington’s concerns. The Pentagon may not have batted an eye at Israel’s pursuit of military ties with Turkey and India following the establishment of diplomatic relations, but China was a different case. Less than a decade after normalization of ties with Israel, both Turkey and India are important markets for Israel’s military-security exports. But Sino-Israeli normalization coincided with the new Washington concerns about Beijing. Both the Israeli and Chinese governments have been keen to build upon their pre-1992 military ties, but U.S. concerns interfered with the development of the relationship. On several occasions, Washington voiced reservations as to Israeli actions.

In early 1992, for example, the George H.W. Bush administration accused Israel of illegally “transferring” to China the Patriot anti-missile system, which the Pentagon deployed in Israel during the Kuwait crisis.[5] Not satisfied with the Israeli denial, State Department inspector general Sherman Funk sent a team to Israel to investigate the allegations.[6] While investigation failed to find a “smoking gun,” the damage was, nevertheless, significant.

Successive directors of the Central Intelligence Agency, most vocally Robert Gates[7] and R. James Woolsey, have voiced suspicion over Israel’s dealings with China. Testifying before a Senate committee in October 1993, Woolsey said, “We believe the Chinese seek from Israel advanced military technology that U.S. and Western firms are unwilling to provide.”[8]

In 1994, U.S. media reports accused Israel of unauthorized transfer of technology associated with the Lavi jet fighter to China.[9] While Israel Aircraft Industries developed the light combat aircraft as an Israeli venture, it relied on U.S. financial support and technology transfers for such key components as the engines. The cancellation of the project in August 1987 resulted in military industry layoffs. The Israeli government looked to Chinese demand for technology to upgrade its F-10 fighters as an opportunity.

In October 1999, President Bill Clinton formally opposed a deal for the Phalcon airborne early warning and surveillance systems on the grounds that the technology that Israel hoped to sell to China undermined U.S. security interests in the Asia-Pacific, especially across the Taiwan straits.[10] In July 2000, and in the wake of months of U.S. threats and intimidation, Prime Minister Ehud Barak announced the deal’s cancellation.[11] That the crisis escalated despite Clinton’s appreciation over progress in the peace process underlined the seriousness of U.S. concerns.

In December 2004, controversy over Sino-Israeli military ties again erupted when the Bush administration objected to the Israeli government’s decision to repair and upgrade the Harpy unmanned aerial vehicle that Israel had sold to China in the 1990s.[12] This time, the Pentagon threatened to terminate or exclude Israel’s participation in the F-35 joint strike fighter program.[13] Israeli media even spoke of a U.S. “boycott” of senior defense ministry officials who were dealing with China.[14] In July 2005, Israeli defense minister Shaul Mofaz canceled his trip to the United States following U.S. demands for a written apology for Israel’s security exports to China.[15]

In August 2005, Amos Yaron, a senior Israeli defense ministry official, resigned over the controversy surrounding arms transfers to China. Yaron was shunned by the Pentagon for months, and U.S. authorities held him responsible for misleading Washington and mishandling the affair.[16] Reflecting on the affair, influential Israeli columnist Ze’ev Schiff observed how much the once close relationship between the U.S. and Israeli militaries had deteriorated. Because “no suitable person who was acceptable to the Americans was found in the Defense Ministry,” Mofaz had “to ask people from outside the Defense Ministry to head the negotiating teams” with the United States.[17]

While the Israeli ministry of defense and the Pentagon signed a memorandum of understanding in August 2005 to clarify cooperation and “to consult on possible threats to U.S. and Israeli defense interests,”[18] the repeated disputes took their toll on both the substance and image of Israel’s credibility as the chief U.S. strategic ally in the Middle East. Much of the criticism came not only from the U.S. mainstream but also from officials otherwise friendly toward Israel. Nearly a dozen U.S. official reports accused Israel of various improprieties, and most of them pertained to its dealings with China.[19]

Perhaps the most devastating of these was the report of the Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China, (popularly known as the Cox Report after House Policy Committee chairman Christopher Cox [Republican, Calif.]). The declassified portion explicitly identified Israel as one of the suppliers of high-tech weapons to China and charged that Israel “has provided both weapons and technology to the PRC [Peoples’ Republic of China], most notably to assist the PRC in developing its F-10 fighter and airborne early warning aircraft.”[20]

U.S. concerns over Israel’s military dealings are both serious and consistent. In a column at the height of the Phalcon controversy, Schiff pointed out, “not one of Israel’s friends in America has come out with a statement justifying Israel’s position.”[21] Nevertheless, such repeated controversies suggest that Israeli officials continue to misread U.S. concerns or ignore the costs of allowing such incidents to develop.

The fallout from such miscalculations to Israel is high. Within the U.S. bureaucracy—and especially inside the Pentagon—Israel’s willingness to trade with a potential U.S. military adversary has undercut goodwill. While congressmen and top executive branch officials still continue to support the U.S.-Israeli relationship, the permanent U.S. bureaucracy has great power to impede and filibuster.

The antagonisms which result from such Sino-Israeli dealings may also erode the willingness of Washington to expend diplomatic capital with other states on behalf of the Jewish state. Israel has often benefited from Washington’s interventions as the State Department prods hostile countries to mitigate their opposition and unfriendly ones to reexamine their policies toward the Jewish state. The Washington factor played a key role in the decision by Pakistani leaders, especially President Pervez Musharraf, to make pro-Israel statements on occasion.[22] The same consideration influenced the Indian government’s January 1992 decision to normalize relations with Israel. New Delhi announced the decision to establish full diplomatic relations, for example, hours before Prime Minister Narasimha Rao left for the United States to attend the summit meeting of the U.N. Security Council where he was slated to meet President George H.W. Bush.

Washington once interceded with China on behalf of Israel.[23] Since 1992, however, the U.S. intervention vis-à-vis China has only been negative for Israel. At the bilateral level, U.S. concerns have made Israeli ties with China hostage to Washington’s demands. While China blamed a “third party” for the cancellation of Israel’s Phalcon deal,[24] the incident is bound to affect the behavior of other states toward Israel. Many would be wary of any defense agreement with Israel unless Washington gives implicit approval, if not an outright green light.

The manner in which India handles its burgeoning military relations with Israel underscores this dimension. For example, speaking before the American Jewish Congress, Indian national security adviser Brajesh Mishra said,

New Delhi is not seeking an Indian-Israeli-U.S. triangle but is rather viewing a convergence of interests as an insurance against any pressure from Washington over military deals with Israel.

Tension with Washington also casts a shadow over Israel’s ability to continue using military exports to pursue both strategic and economic objectives. Given its limited resource base, arms exports have become the second largest source of foreign exchange earnings (after diamonds) for Israel.[26] Its expertise in improvisation, upgrading, and innovation is much sought after. In areas such as counterterrorism, electronic warfare, border fencing, and surveillance, Israel has established a unique reputation. Countries unable to afford complete replacement for their existing platforms find Israel’s upgrading expertise cost effective.

Arms exports serve another purpose. Unlike its Arab adversaries, Israel is not a member of any of the regional organizations. Its ability to offer politico-economic support is limited. Military exports and security assistance play an important role in promoting Israel’s foreign policy interests. Israel’s closeness with a country is often correlated to security cooperation. For example, Israel’s emerging close political ties with India and Turkey contain a strong military component,[27] as did its past ties to South Africa. Absent the confidence of other states in Israel’s ability to fulfill contracts, the Jewish state’s strategic outreach might be undercut. At the very least, Sino-Israeli relations would weaken if Israel were prohibited from pursuing the lucrative Chinese arms market.

Repeated conflict with Washington over Sino-Israeli military dealings has also eroded Israel’s credibility as a dependable arms supplier. Major suppliers often abandon their commitments, dragging recipient countries into unforeseen misery. This occurred when Paris, for example, placed an arms embargo on Israel following the 1967 Six-Day war and when Washington abandoned Argentina during the 1982 Falkland Islands war. The United States and many European countries increasingly link human rights concerns to the flow of arms. Israel, though, always followed a no-questions-asked policy and so established a reputation for reliability. Despite U.S. displeasure, for example, Prime Minister Menachem Begin honored his commitments to Argentina during the Falklands war.[28]

By complying with the U.S. veto over the Phalcon and then Harpy deals with China—or by permitting itself to get into such a quandary in the first place—Israel has allowed its credibility to be dented. Countries must now consider that the Israeli arms market might be off-limits should they have policy differences with Washington. Many may find it easier to deal with Washington directly rather than negotiate with an unreliable Israel.

Such an outcome would also erode the Israeli government ability to position itself as a diplomatic door to Washington. One of Israel’s leading strategic analysts, Efraim Inbar, for example, described how Ankara used the Jewish State to open doors in Washington that the Greek and Armenian lobbies had once closed.[29] He described how Israel “conducted a concerted effort to instruct American Jewry on the strategic significance of Turkey, [and] American-Jewish organizations were induced to add Turkey to the itinerary of many high-level missions regularly sent to Israel.”[30]

Likewise, in an editorial the day Sino-Israeli relations were established, Hong Kong-based Wen Wei Pao reminded its readers:

Under such circumstances, the Israeli government’s failure to resolve the controversies surrounding military sales to China in its favor not only undermined perception of the Jewish state’s leverage in Washington but also may have undercut Israel’s security.

The perception of Israel’s proximity to Washington has been a pillar of its security. Anti-American demonstrations and diplomatic anger have never prevented the United States from exercising its veto in the U.N. Security Council in favor of Israel. Many countries, including prominent European allies, envy Israel’s proximity to the United States.

The Israeli government has no alternative to U.S. support. Despite growing international discontent over its policies, Washington’s unilateralism is Israel’s strength. The Israeli government cannot count on any other state to come so consistently to its defense.

While the U.S. Congress has long supported Israel, recent controversies surrounding the American Israel Public Affairs Committee (AIPAC) may erode the enthusiasm with which U.S. officials support Israel. Opposition to Israeli arms deals may also have a commercial dimension when the Pentagon feels it is subsidizing the Israeli arms industry only to find it has created a competitor in the arms export bazaar. Indeed, commercial considerations at times compel the U.S. government to oppose Israeli arms exports to other countries including China.[32]

In 1973, Israeli military intelligence and top politicians misread Egyptian intentions. Following the Yom Kippur war, the Israeli state held them accountable.[33] Unlike its strategic errors then, the current Israeli blindness toward U.S. concerns over China are more serious and systemic. Israel’s misreading of U.S. concerns does not have a single address. The problems span the Israeli political parties. Both Labor and Likud officials have endorsed policies that were bound to undermine the Israeli government’s strategic ties with Washington. Israeli officials have pursued policies toward China that have undercut the trust of the only true ally of the Jewish state.

Reflecting on the Patriot controversy, former defense minister Moshe Arens said, “Although the charges were totally untrue, the U.S. had reasons to be suspicious because in the past there had been allegations that some Israeli systems that included a few U.S. components had been sold to China.” Admitting that "[the] matter has been neglected for too long,” he counseled both sides to “respect” each other’s security concerns.[34] Therein lays the key to this long and painful U.S.-Israeli tension over China.

[1] “Israel’s Diplomatic Missions Abroad: Status of Relations,” Israel Ministry of Foreign Affairs, Dec. 12, 2005.
[2] P.R. Kumaraswamy, “The Star and the Dragon: An Overview of Israeli-PRC Military Relations,” Issues and Studies (Taipei), Apr. 1994, pp. 36-55; idem, “The Military Dimension of Israel-China Relations,” China Report, Apr.-June 1995, pp. 235-49. For a more skeptical assessment, see, Yitzhak Shichor, “Mountain out of Molehills: Arms Transfers in Sino-Middle Eastern Relations,” Middle East Review of International Affairs, Fall 2000, pp. 68-79.
[3] For example, U.S. National Security and Military/Commercial Concerns with the People’s Republic of China, report of the Select Committee (hereafter, Cox Report), May 1999.
[4] The Taiwan Relations Act of 1979, “Findings and Declaration of Policy,” Sec. 2. (b) (3), states that the decision of the United States “to establish diplomatic relations with the People’s Republic of China rests upon the expectation that the future of Taiwan will be determined by peaceful means.”
[5] Sherman Funk, State Department inspector general, interview, The Washington Jewish Week, Mar. 19, 1992, reproduced in Supplement to Israeli Foreign Affairs, Apr. 18, 1992, pp. 1-2.
[6] Report of Audit: Department of State, Defense Trade Control, 2-CI-016, U.S. Department of State, Office of the Inspector General, Mar. 1992.
[7] Israel Foreign Affairs, Feb. 26, 1993, p. 6.
[8] Financial Times, Oct 14, 1993.
[9] The Jerusalem Post, Dec. 29, 1994. For a detailed and somewhat personal account of the Lavi controversy between Israel and the United States, see Dov S. Zakheim, Flight of Lavi: Inside a US-Israeli Crisis (Brassey’s, 1996).
[10] Shichor, “Mountain out of Molehills.”
[11] The Jerusalem Post, July 14, 2000; Ha’aretz (Tel Aviv), Dec. 28, 2001.
[12] Yitzhak Shichor, “The U.S. Factor in Israel’s Military Relations with China,” China Brief (Jamestown), May 24, 2005. By 1999, Israel supplied about 100 UAVs to China.
[13] Ha’aretz (English online edition), Apr. 16, 2005; The Jerusalem Post, Apr. 17, 2005.
[14] Ha’aretz, June 15, 2005.
[15] Ha’aretz, July 27, 2005.
[16] Ha’aretz, Sept. 1, 2005.
[17] Ha’aretz, July 29, 2005.
[18] U.S. Department of Defense, news release, Aug. 16, 2005.
[19] National Security: Perspectives on Worldwide Threats and Implications for U.S. Forces, report to the chairman, Senate and House Committees on Armed Forces, Apr. 1992; Economic Espionage: The Threat to U.S. Industry, testimony before the Subcommittee on Economy and Commercial Law, Committee on Judiciary, House of Representatives, Apr. 29, 1992; Military Sales to Israel and Egypt: DOD Needs Stronger Control over U.S.-Financed Procurement, report to the chairman, Subcommittee on Foreign Operations, Export Financing and Related Programs, Committee on Appropriations, House of Representatives, July 1993; U.S.-Israel Arrow/ACES Program: Cost, Technical, Proliferation, and Management Concerns, report to the chairman, Committee on Appropriations, Aug. 1993; Foreign Military Aid to Israel; Diversion of U.S. Funds and Circumventing of U.S. Program Restrictions, testimony before Subcommittee on Oversight, Investigation, Committee on Energy and Commerce, House of Representatives, Oct. 27, 1993; National Security: Impact of China’s Military Modernization in the Pacific Region, report to congressional committees, June 1995; Defense Industrial Security: Weaknesses in U.S. Security Arrangements with Foreign-owned Defense Contractors, report to the congressional requesters, Feb. 1996; Economic Espionage: Information on Threat from U.S. Allies, testimony before the Select Committee on Intelligence, U.S. Senate, Feb. 28, 1996; China: U.S. and the European Union Arms Sales since 1989 Embargo, testimony before the Joint Economic Committee, Apr. 28, 1998; China: Military Imports from the United States and the European Union since 1989 Embargo, report to the chairman, Joint Economic Committee, U.S. Senate, June 1998; Cox Report.
[20] Cox Report.
[21] Ze’ev Schiff, “The Spy Plane Isn’t the Only Problem,” Ha’aretz, June 21, 2000.
[22] Pervez Musharraf, address to the American Jewish Congress, New York, Sept. 17, 2005.
[23] Aaron S. Klieman, quoted in Jane’s Defence Weekly, Oct. 10, 1987.
[24] In the words of one Chinese official, “We have realised that what happened with the [Phalcon] plane is not only the fault of the Israeli government … There were some external factors involved as well.” Shichor, “The U.S. Factor.”
[25] Brajesh Mishra, address to the American Jewish Committee, Washington, D.C., May 8, 2003.
[26] For a dated but interesting discussion on this, see, Aaron S. Klieman, Israel’s Global Reach: Arms Sales as Diplomacy (Washington D.C.: Pergman, 1985).
[27] The Hindu (Chennai, India) Aug. 16, 2001.
[28] Bishara Bahbah, “Israel’s Military Relationship with Ecuador and Argentina,” Journal of Palestine Studies, Winter 1986, pp. 91-2.
[29] Efraim Inbar, The Israeli-Turkish Entente (London: King’s College, 2001), p. 40.
[30] Ibid., p. 41.
[31] Wen Wei Pao (Hong Kong), Jan. 25, 1992, in Foreign Broadcast Information Service-China, Jan. 27, 1992, pp. 18-9.
[32] For example, see reports of U.S. attempts to scuttle an Israel-South Korea military deal, Ha’aretz, Dec. 8, 2005.
[33] Following the publication of the Agranot Commission report on the 1973 war, Prime Minister Golda Meir, Defense Minister Moshe Dayan, and senior generals resigned from their positions. Jewish Agency for Israel Timeline, accessed Dec. 12, 2005.
[34] Moshe Arens, “The Enemy of Our Friend,” Ha’aretz, June 21, 2005.