Israel-Hamas war: How is China juggling Israeli economic ties with its pro-Palestine stance

The story so far: Commenting on Beijing’s stance on the ongoing Israel-Hamas war, Chinese Foreign Minister Wang Yi, on October 24, stated that Tel Aviv had a right to self-defence against Hamas. In a telephone call with his counterpart Eli Cohen, Mr. Wang re-affirmed that every country has a right to self-defence but should abide by international humanitarian law and protect civilians, according to a Bloomberg report.

Previously, Beijing had termed Israel’s actions as “beyond the scope of self-defence,” as Tel Aviv ordered one million residents of northern Gaza to evacuate within 24 hours ahead of its ground assault. Mr. Wang said, “Israel’s actions go beyond the scope of self-defence. It should heed the calls of the international community and avoid collective punishment of the people of Gaza,” in a phone call with Saudi Foreign Minister Prince Faisal bin Farhan Al Saud on October 14.

Beijing’s comment regarding Tel Aviv came before Mr. Wang’s Washington visit where he was set to discuss a summit between Chinese President Xi Jinping and U.S. President Joe Biden. China, Israel’s largest Asian trading partner, has offered to mediate peace talks between Israel and Hamas as the war escalated. As of date, Israel has reportedly killed over 9700 people in Gaza via air and ground strikes since October 7 when Hamas killed over 1400 people in Israel and took 240 residents as hostage.

Through the years, Beijing’s relations with Israel has evolved from recognising it as an independent Jewish state to supporting the establishment of Palestine as part of a two-state solution.

 Historical ties – Military, then diplomatic

 Recognition & boost in arms sale

China was one of the first countries to recognise Israel as an independent sovereign nation following the formation of Israel in 1949. Similarly, Israel too recognised the Communist party-established People’s Republic of China in 1950, a year after the Communist Party defeated the Kuomintang in the Chinese Civil War.

Since then the ties between the two nations remained weak as China aligned with several Arab nations and even supported the Palestinian cause. At the Bandung Conference in 1955, then Chinese Premier Zhou Enlai pledged support for establishing Palestine as an independent nation. Later in the 1960s, members of the Palestinian Liberation Organization (PLO) visited China where they were offered military training by Beijing.

Sino-Arab ties strengthened further in the 1970s when several Arab nations and Iran faced were facing armed revolutions and a change in administration to a more dictatorial and military leadership from a democratic western-backed political government. Throughout these revolutions, China supported most Arab military leaderships, both ideologically and by supplying arms.

As China entered the Deng Xiaoping era, Sino-Israeli ties revived in a pragmatic manner. Tapping into China’s ambition to expand its military, in the 1980s, Israel began exporting equipment such as missiles, radars, and navigation systems as well as transferring military technology. These military contracts were promoted by the United States in the last stages of the Cold War (late 1980s to 1991) in a bid to contain the Soviet Union (USSR) and break through Israel’s diplomatic isolation.

Notable military deals include technology transfer of Israel’s Python-3 air-to-air missiles which aided in the development of China’s PL-8 missiles (both ground-to-air and ship-to-air). China also imported the EL/j-7M-2032 planar array radar system which was integrated into its J-7 fighter jets – the Chinese version of the MiG-21.

Diplomacy strengthens, US hinders military ties

Military ties between China and Israel were subject to Western ire during the 1989 Tiananmen Square massacre, when the PLA used military force to clear student protestors at the Square, killing hundreds and injuring thousands. The U.S. and many European nations condemned the PLA’s aggression, threatening to suspend military technical projects with Beijing, and subsequently banning arms sales to it.

By 1992, the military ties transformed into diplomatic ones, with each country formally opening embassies in Tel Aviv and Beijing respectively. As China sought to fill the vacuum created by the fall of USSR in a post-Cold War world, the U.S. viewed its growing global stature as competition to its own. Post-Tiananmen Square, Washington started expressing concerns over Sino-Israeli military pacts, accusing Tel Aviv of transferring sensitive American military technology to China. Throughout the 1990s, China and Israel kept their defence deals under wraps to avoid US scrutiny. However, arms exports from Israel to China remained $28-38 million on average each year, as per Stockholm International Peace Research Institute (SIPRI).

In 2000, the U.S. stalled the sale of Israel’s Phalcon airborne early warning and control systems (AEWC) to Beijing, fearing its potential use in an offensive against Taiwan. This soured Sino-Israeli military ties, with Tel Aviv agreeing to pay China $350 million in compensation and strengthening its ties with the U.S. Similarly, in 2005, Washington objected to the upgradation of China’s Harpy drones, bought from Israel, claiming that it contained U.S.-produced subsystems. The deal was eventually cancelled.

Sino-Israel defence deals have been stalled since then.

Sino-Israeli economic ties

Since the establishment of full diplomatic relations in 1992, Israel and China have robust economic trade relations. Bilateral trade was estimated to be $50 million in 1992 and has now rapidly expanded to $17.62 billion in 2022, according to Israel’s Institute for National Security Studies (INSS). With Benjamin Netanyahu coming to power in 2009 and Xi Jinping in 2013, the two nations strengthened their technological cooperation, pushing massive Chinese investment in Israel.

China launched its ambitious infrastructure project, the Belt and Road Initiative (BRI), in 2013 and chose Israel as its biggest investment destination among the Middle Eastern and North Africa (MENA) nations. Between 2005 and 2018, China invested $12.19 billion in construction projects in Israel, according to AEI China Global Investment Tracker. This is despite Israel not formally joining the initiative.

China also imports Israeli computers, electronic and optic equipment, minerals and mining materials, chemicals, metals, food and beverages, plastic, rubber, wood and leather, agriculture, forestry and fishing goods. As per INSS, Israel’s exports to China has grown from $2.58 billion in 2013 to $4.5 billion in 2022.

Similarly, Israel too imports many Chinese goods, mainly cars, batteries, electronic equipment, machinery, and consumer products. Its imports from China have increased from $5.64 billion in 2013 to $13.12 billion in 2022, adding $8.62 billion in trade deficit to the Israeli economy. After the European Union ($49.19 billion), and the U.S. ($22.04 billion), China is Israel’s third biggest trading partner – dealing almost entirely in goods and commodities, not services.

China’s stance on Israel-Palestine dispute

Since 1950, Beijing has backed Palestine’s claim for independence, but never commented on Israeli settlements in West Bank. Most recently, at the Belt and Road Forum held in Beijing, Mr. Xi called for a ceasefire in the ongoing Israel-Hamas war, and expressed hope for implementing the two-state solution (establishing Israel and Palestine as independent nations as per UN-drawn borders).

In the aftermath of the October 7 attack by Hamas, most Western leaders condemned the militant group, with state heads visiting Israel. However, China has not condemned Hamas. It sent its Middle East envoy Zhai Jun to Qatar, Egypt, Saudi Arabia, the United Arab Emirates and Jordan — but to neither Israel nor Palestine.

Both Russia and China vetoed the U.S.-led proposal at the UN Security Council calling for UN action in the Israel-Gaza war, asserting Tel Aviv’s right to defend itself and demanding Iran stop exporting arms to militant groups. Beijing vetoed the proposal claiming that it “did not reflect the world’s strongest calls for a ceasefire and help resolve the issue.”

However, China supported an Arab-backed UN proposal that called for “an immediate, durable and sustained humanitarian truce” in Gaza. While the motion passed, fourteen nations including Israel and the U.S. voted against it. China’s actions were severely condemned by Israeli Foreign Minister Eli Cohen, who called it a “despicable call for a ceasefire.”

China initially criticised Israel’s actions in Gaza, calling it “beyond the scope of self-defence,” and asserted that “justice has not been done to the Palestinian people.” However, following the Hamas attack, China reaffirmed Tel Aviv’s right to defend itself while highlighting civilian casualties in Gaza and omitting Israeli casualities.

In an interview to news network Al Jazeera, William Figueroa, an assistant professor at the University of Groningen, said that the Chinese playbook in the Middle East often followed the same pattern — an cautious initial stance, calls for peace, condemning violence against civilians and primarily focusing on Palestinian grievances. He added that China’s deep economic ties with oil-rich states like Saudi Arabia, UAE, and Iran has prompted it to take a more pro-Palestine stance.

Uyghurs & the U.S. link to China’s pro-Palestine stance

China’s stance has also been linked to Palestinian Authority President Mahmoud Abbas’ support for China’s treatment of Muslim Uyghurs in Xinjiang. The vast community’s forced detention in camps has been termed as ‘genocide’ by most Western nations, but this was denied by Mr. Abbas. Terming China’s action in Xinjiang as countering extremism and terrorism, Mr. Abbas condemned interference in Beijing’s internal affairs. Incidentally, the majority of Uyghur Muslims and Palestinian Muslims fall under the Sunni sect of Islam.

Israel, on the other hand, signed a declaration at the UN Human Rights Council in 2022, expressing “grave concerns about the human rights situation in Xinjiang Uyghur Autonomous Region,” but did not term it a genocide.

Another factor fueling China’s stance against Israel is Washington’s steadfast support of Israel, extending to sending troops to counter Hamas. Openly condemning the U.S., China’s state-controlled daily Global Times has accused Washington of “adding fuel to the fire by blindly backing Israel in the ongoing conflict.” Pinning the increasing civilian casualties on the US, Global Times said that the US was “stained with the blood of innocent civilians.”

Beijing, which heads the UN Security Council this month, has called for a closed-door deliberations by its fifteen members next week on the Israel-Hamas war, focusing mainly on Gaza. While Beijing hopes for a ceasefire soon with its involvement in the negotiations, it seems unlikely in the face of Israel’s siege of Gaza.