Elissar Karam, Lebanese economic journalist
It is no longer a secret that the relationship between China and Israel is governed by economic interests, regardless of any ideological or political transformation. This dynamic stems, on the one hand, from the Chinese approach based on expansion and projection of power at the service of economic strength, and, on the other hand, from the Israeli approach focused on the maximum exploitation of opportunities and the maximisation of earnings, by mobilizing economic relations at the service of technological and strategic objectives.
Despite the historic and strong alliance between Israel and the United States — China’s declared opponent — and international political change and developments in the Middle East, China and Israel have been able to maintain the stability of their cooperation on the basis of mutual interests.
While some believe that China’s repeated calls for a ceasefire in Gaza since the beginning of the Israeli war on 7 October 2023, as well as its diplomatic positions in favour of the rights of the Palestinian people, have been able to affect its economic and trade relations with Israel, the figures show the opposite. Indeed, the volume of trade between China and Israel intensified rather than slowed down at the height of the war in Gaza. According to data published on the official OECD website, the period from August 2024 to August 2025 saw an increase of 122 per cent in Israeli exports to China, while Chinese exports to Israel increased by 9.19 per cent. Even though many countries around the world have reduced their trade with Israel or suspended certain exports that could fuel violence.[i]
Chinese investment in Israel has not stopped (for example, the operation and management of the port of Haifa Bay). Bayport by the group of ports of Shanghai). Similarly, technological and scientific cooperation in R&D has continued: there are no data indicating that the activities of Chinese companies Alibaba and Huawei in Tel Aviv have ceased. Conversely, Israeli society IDE Technologies continued to build and develop the largest thermal desalination station in China. There were no reports of a suspension of joint infrastructure projects, nor of a complete stoppage of maritime or air traffic: the direct flights Beijing-Tel-Aviv resumed in April 2025 with Hainan Airlines, while it was confirmed that the company COSCO Shipping had only temporarily suspended shipping, not permanently.
Practical cooperation
China and Israel established their official diplomatic relations in 1992, after decades of China’s reservation to open up to Tel Aviv and public support for the Palestinian cause[ii]. However, their economic exchanges date back to 1987, when then Israeli Prime Minister Shimon Peres founded public society. Koor Trade Company (Kopiko) to develop business activities between Chinese and Israeli companies[iii].
Economic relations remained limited during the 1990s, before gradually growing during the first two decades of the twenty-first century. They have expanded to include the political, economic, military, cultural and academic dimensions, as well as the technology and innovation sectors. Today, China has become Israel’s leading trading partner in Asia, and the second in the world, after the United States[iv].
The main investments and areas of economic cooperation between Israel and China are reflected in the following projects:
1. Mutual investment
- Operation and management of the port of Haifa Bayport for a period of 25 years by the Shanghai International Port Group (SIPG) from 2021; The investment was estimated at about $1.7 billion at its inauguration on September 2, 2021.
- Acquisition of Playtika, an Israeli online gaming company, by a Chinese consortium in 2016 for $4.4 billion in cash – one of the largest bilateral technology transactions.
- Take over of the Israeli agrochemical company ADAMA by ChemChina through an agreement initiated in 2011 and subsequently completed – one of the largest Chinese operations in Israel.
2. Technological and scientific cooperation (R&D)
- Alibaba acquired the technology of Israeli society Visualead and established a Tel Aviv R&D Centre in 2017 dedicated to computer vision and advanced QR codes.
- Huawei runs a large R&D centre in Israel (Toga Networks) employing about 500 researchers despite US restrictions; its local activity is documented for the period 2022–2023.
- IDE Technologies, an Israeli company, built the largest thermal desalination plant in China and doubled its capacity in 2013 – a clear example of the transfer of Israeli know-how to China.
- Netafim, pioneer of dripping, expanded its irrigation projects in China and opened a local production plant.
3. Joint Projects and Infrastructure (Joint Ventures & Infrastructure)
- Tel Aviv tram red line (Dankal):
- CRRC Changchun provided 100 per cent low floor trainsets, which were commissioned in 2023.
- China Railway Tunnel Group (CRTG) carried out the digging of the main tunnels under a contract won in 2015.
- Carmel Tunnels in Haifa (BOT): drilling work was entrusted to the China Civil Engineering Construction Corporation (CCECC). The project, inaugurated at the end of 2010, was one of China’s first major investments in Israeli infrastructure.
- Haifa Bayport Port: itself a major infrastructure and logistics project, operated by SIPG using state-of-the-art technologies.
4. Tourism and human exchanges
- Visa Facilitation Agreement (2016): introduction of a 10-year multiple entry visa between Israel and China, facilitating travel in both directions, particularly for Israelis travelling to China.
- Resumption of direct flights Beijing–Tel-Aviv (April 2025) by Hainan Airlines after an 18-month interruption; Two weekly flights re-establish Israeli business and tourist travel channels to China.
5. Transport and logistics services
- Lignes maritimes Chine–Israël :
- COSCO Shipping announced a temporary suspension of its ports of call in Israel during the Red Sea crisis in early 2024, slightly disrupting bilateral maritime trade, before indicating a partial restart according to security conditions.
- ZIM Integrated Shipping Services maintain routes linking China to the Mediterranean, adjusted to the geopolitical context.
- Air transportation: Tel-Aviv–Pekin direct flights provided by Hainan Airlines support light supply chains and commercial travel.
- Geopolitical logistical impact: Attacks in the Red Sea since the end of 2023 have led to road detours, rising costs and transit times on the Asia-Israel lines, affecting global companies such as COSCO and others.
The unprecedented growth in trade between China and Israel over the past decade (2015-2025) has been particularly remarkable. It is based on a purely pragmatic foundation: on the one hand, China’s compelling need for Israeli technology and innovation to stimulate its economy, and on the other hand, Israel’s willingness to access the vast Chinese capital, its extensive markets and its expertise in manufacturing, mass production and export.
In 2024, total trade between China and Israel reached about $22.7 billion[v]. Chinese exports to Israel amounted to $14.3 billion, while Israeli exports to China reached $8.4 billion.
According to data published on Trading Economics, the vehicle sector (excluding railway equipment and trams) accounted for the largest share of Chinese exports to Israel, valued at $2.20 billion. It is followed by electrical and electronic equipment and apparatus ($1.89 billion), followed by machinery, nuclear reactors and boilers ($1.65 billion). The value of plastics was $723.86 million, while clothing and textiles reached $714.64 million. Exports also included furniture, lighting, signalling and prefabricated construction ($643.43 million), iron or steel products ($553.89 million), aluminum ($463.93 million) and optical, photographic, technical and medical equipment ($409.83 million)[vi].
In return, Chinese imports from Israel reached significant levels in several sectors. The Electrical and Electronic Equipment and Appliances sector ranked first on the import list, valued at $5.09 billion, followed by optical, photographic, technical and medical equipment ($1.74 billion). China also imported from Israel machinery, nuclear reactors and boilers ($355.78 million) and fertilizers ($226.11 million). These included imports of inorganic chemicals and precious metal compounds ($159.39 million), organic chemicals ($122.93 million), and pearls, precious stones, metals and coins ($96.82 million). The value of agricultural products, such as vegetables, fruit and nuts for direct non-food consumption, was $95.81 million, while the value of basic metal tools and appliances was $55.82 million.
In 2025, until August, Israeli exports to China amounted to $1.79 billion, while Chinese exports to Israel amounted to $1.46 billion, resulting in a trade surplus of $334 million in favour of Israel.[vii].
The economic relationship between Israel and China does not seem to be at a crossroads. On the contrary, it appears that the two countries have so far neutralized their mutual interests in the face of growing geopolitical tensions. However, this does not preclude a certain disruption of economic relations because of China’s positions regarding the Israeli war in Gaza, which has provoked discontent both from Israel and from its strategic ally, the United States.
Cooling relationships
The economy sometimes collides with the strategy. In recent years, Washington has thus opposed the expansion of economic relations between Beijing, its most declared opponent, and Tel Aviv, its closest ally and recipient of its sensitive technologies.[viii]. According to some researchers, Chinese-Israeli relations have cooled down as a result, in addition to the warnings of the Israeli security services to the government against the increasing presence of Chinese companies in the critical infrastructure and advanced technology sectors, for fear of their exploitation for espionage activities that undermine national security[ix]. This decline has worsened since the end of 2023, owing to the political differences resulting from China’s position in favour of Palestinian rights, and Beijing’s call for a ceasefire in Gaza and the delivery of humanitarian aid, following the war launched by Israel on 7 October 2023, which rapidly turned into genocide, according to United Nations recognition.
U.S. reserves began to manifest publicly in 2018, when officials of the U.S. Department of Defense expressed concern about the management of the port of Haifa by the Chinese company Shanghai International Port Group (SIPG), as part of a 25-year concession that came into effect in 2021. This concern is due to the fact that the port hosts the Sixth U.S. Fleet, which could allow China to monitor or collect sensitive information[x]. The U.S. Congress has also repeatedly warned against the expansion of the influence of Chinese companies in Israeli infrastructure, while the U.S. Department of State urged Tel Aviv to adopt a similar oversight mechanism to the Committee on Foreign Investment in the United States (CFIUS)[xi].
Israel responded to these pressures in October 2019, approving the establishment of a government commission to review foreign investment in strategic sectors, including representatives from the Ministries of Finance, Defence and the National Security Council[xii]. This decision followed warnings from the head of the Internal Security Service (Shin Bet), Nadav Argaman, who called for increased monitoring of Chinese activity, for fear of technological infiltration threatening national security. Consequently, what can be described as a “selective braking” of economic cooperation has started[xiii]. In 2020, a Chinese company involved in the tender for the construction of the “Sorek-2” desalination plant lost to a local Israeli company, after the US administration had conveyed its direct objection to the Israeli government. The scenario was repeated in 2022 when Chinese consortia were excluded from tendering for the Tel Aviv light train, which was seen as a reflection of a more cautious political and security position. On the other hand, the operation of the port of Haifa, managed by SIPG, has continued since September 2021, despite the controversy it caused in Israel, reflecting Tel Aviv’s desire to maintain a balance between security and commercial interests.[xiv].
With the outbreak of the war in Gaza on 7 October 2023, the political gap between the two countries widened, without destroying economic interests. Indeed, Beijing refrained from condemning Hamas, calling instead for an immediate ceasefire and the delivery of humanitarian aid to the enclave, while reaffirming the “legitimate rights of the Palestinian people” [xv]. Tel Aviv responded by convening the Chinese ambassador to express his “deep disappointment” at the Beijing position. This political divergence increased diplomatic cooling, but did not lead to a total economic breakdown.[xvi].
Despite the political chill, China remained the main source of Israeli imports in 2024, and total trade between the two countries increased by 11.7% compared to 2023. This reflects the persistence of economic interconnection based on the exchange of civilian goods and technologies, notwithstanding political prudence.
In short, the Sino-Israeli relationship goes through a phase of “controlled cooling” rather than a free break. Security and technological areas are now subject to strict control and direct U.S. pressure, while trade relations continue to operate in less sensitive areas. Therefore, it can be said that Israel is trying to play the balance between Washington and Beijing. It is aware that the former is a matter of national security, but cannot ignore the importance of the latter as a key trading partner and a source of investment and technology that is essential to the Israeli economy.
Military cooperation
Military cooperation between China and Israel has gone through various phases. In the 1980s and 1990s, Israel was an important source of advanced military technology for China, including combat aircraft and radar technology. However, this direct cooperation almost entirely ceased under intense pressure from the United States, the most significant incident being Israel’s obligation to cancel the sale of “Falcon” early warning aircraft to China in 2000.[xvii]
Today, there is no direct and declared military cooperation, and it is impossible to find precise official figures on the volume of direct military sales, if they exist. The cooperation has moved rather towards a grey and more complex area: that of “Dual-Use Technologies”. China invests heavily in Israeli companies that develop technologies in areas such as artificial intelligence, semiconductors, drones and cybersecurity; technologies that can be easily adapted for military purposes.[xviii] United States pressure has also led to a significant decline in this area, as Israeli exports of semiconductors to China have declined significantly in recent years.
Historically, Israel has sold to China important military technology components. For example, since 1979 billions of dollars (the exact figure is not specified) of equipment or technology have been sold by Israel to China, mainly as key components and prototypes. Although Western countries also sold arms to China (before 1989), Israel has contributed more to improving the quality of Chinese army armaments. After Western countries banned arms sales to China, Beijing turned to Russia, Ukraine and Israel, to the point that in 2010, Israel ranked second, after Russia, as a supplier of advanced weapons systems and military technologies to China.[xix]
In the 1990s and early 2000s, Beijing sought to acquire military technologies, but American objections to such cooperation never ceased, forcing Israel to address Washington’s concerns by cancelling these sales. In other words, since 2000, the United States has been directly involved in the sale of Israeli weapons to China. However, there are reports of secret or illegal operations that occur from time to time. In February 2021, the Israeli intelligence service (Shin Bet) arrested at least 20 Israelis for their involvement in the development, manufacture and sale of illicit ammunition to an “unnamed Asian country”.
China did not hide its dissatisfaction with the cancellation of Israeli arms sales, but it did not give up its cooperation with Israel in other areas. The Chinese Communist Party is aware that Israel has leading skills in artificial intelligence, Big Data and agricultural technologies. As a result, Israel currently hosts more than 430 research and development centres for world-class companies, including Chinese companies.
On the other hand, Israeli military imports from China were extremely low, notably between 2014 and 2022, estimated at $3.1 million, and details of exported equipment were not disclosed.[xx] Data from the Stockholm International Peace Research Institute (SIPRI) show that China is not a major supplier of weapons to Israel, specifically for the period 2019-2023, where it was not included in the list of countries supplying weapons to Israel. It appeared that three countries have provided major weapons to Israel, namely the United States, Germany and Italy, while other countries have provided military components, ammunition or services to Israel, including the United Kingdom, France and Spain.[xxi]
At the same time, some specialized reports indicate that Israel, over the past decades, has helped China develop parts of its military programme, but often under US pressure, or through short-term technical cooperation.[xxii]
In this context, the outbreak of the Israeli war against Gaza on 7 October 2023 did not affect military cooperation. To date, there are no reliable or public data indicating that China has provided Israel, or vice versa, with new arms sales or military agreements. On the contrary, China officially declared that it “did not provide arms or equipment to the zone of conflict” between Palestine and Israel.[xxiii]
In conclusion, it can be said that military cooperation between the two countries is not currently a flourishing area, and it is not expected to become so in the future, due to clear Chinese positions opposing Israeli violence against the Palestinians, as well as American pressure on Tel Aviv.
Vital or temporary necessity?
From China’s point of view, why is cooperation with Israel important? And does she have a vital need?
From a technological and innovative point of view, Israel is nicknamed the “Nation start-up” (Start-up Nation). It has leading sectors in cybersecurity, smart agriculture, water technology and innovation in general. China therefore values these capabilities and integrates them into its technology transfer and development strategy in intermediate-higher-level industries.
From a geographical and logistical point of view, Israel has a facade on the Mediterranean Sea and can serve as a bridge between Asia-China and Europe/Eastern Mediterranean basin, notably as part of Chinese infrastructure initiatives such as “The Belt and the Road” (Belt and Road) or transcontinental freight corridors.
From a financial and investment point of view, China is seeking high-value investment opportunities, whether through the acquisition of Israeli technology companies or investment in infrastructure (ports, railways, energy). It provides financial returns and contributes to its global economic strategy.
From a political point of view, China could gain influence in the Middle East through cooperation with Israel and thereby improve its status as an international actor, particularly on issues of mediation, energy, maritime security and the development of relations with Arab and regional States.
From Israel’s point of view, why is cooperation with China important? And does she have a vital need?
From a technology and supply chain perspective, Israel still needs partnerships in the manufacturing of electronic components and technologies. hardware supply at competitive cost from Asia. Although Israel is a power of innovation and softwareChina provides access to deep and diversified supply systems with production capacities that are not locally available on the same scale.
In terms of markets and trade expansion, the huge Chinese market represents a growth field for Israeli companies in medical technology, intelligent agriculture, water and industrial digitization. Access to continental demand enables Israeli companies to increase sales, test large-scale solutions and establish joint distribution and financing alliances.
On the financial and investment side, the presence of Chinese investors and companies in transactions offers competitive financing alternatives and creates positive pressure on Western offer prices. It also opens the door to joint projects combining Chinese capital with Israeli technology – even though Israel, under US pressure, now selects less sensitive sectors.
Geographically and logistically, China is a major hub in global shipping routes and supply chains. Balanced cooperation with Israel facilitates strategic supply (equipment, intermediate materials) and improves freight conditions to Asia, thereby supporting the competitiveness of Israeli industries in times of supply disruption.
Politically and diplomatically, maintaining an effective channel with Beijing could give Israel room for manoeuvre on some issues and demonstrate its ability to diversify its partners rather than rely entirely on one path. This also allows for wider Asian initiatives if trade cards or value chains change.
At the end of the above, it can be said that neither China nor Israel have an absolutely vital need for each other, and neither of them is an exclusive and indispensable ally if political interests or regional positions diverge. Both have broad partnerships and can redirect their attention to other partners if they feel that the Sino-Israeli relationship is beginning to involve a major political or security risk.
The Fragile Relationship
Relations between Israel and China appear as brittle glass (or: fragile as glass). This relationship is made even more fragile by their membership in two opposing camps. Israel is an integral part of the Western bloc led by the United States and depends on it for its security and survival. Conversely, China is at the head of the eastern bloc that defies American hegemony.
This fundamental contradiction imposes strict constraints on their relations, particularly economic relations. Every business transaction or investment, and every infrastructure project, is subject to careful scrutiny in terms of strategic rivalry between Washington and Beijing. Israel is constantly forced to juggle (or strike a balance) between the economic benefits of its relationship with China and the strategic risks of discontenting its indispensable American ally.
At the same time, China-Israel economic and trade relations are a striking example of how pragmatic interests can transcend deep historical and ideological differences. Both countries have built a strong and mutually beneficial economic partnership, fuelled by a unique complementarity between Israeli technology and Chinese capital. Nevertheless, this partnership is governed by a glass ceiling imposed by geopolitical realities. The future will see the persistence of this delicate balance, where the economy evolves on the one hand and strategic policy on the other.
[i] Observatory of Economic Complexity (OEC). (s.d.). Bilateral trade profile: Israel – China. Recovered from https://oec.world/en/profile/bilateral-country/isr/partner/chn
[ii] Liphshiz, C. (2009, 25 septembre). China marks 17 years with Israel. Haaretz. Recovered from
[iii] Shai, A. (s.d.). Sino-Israeli Relations: Current Reality and Future Prospects. Department of East Asian Studies, Tel Aviv University.
Archived at: https://web.archive.org/web/20130701012620/http://mideast.shisu.edu.cn/picture/article/33/81/10/ca7475ef4594a8e57aaaaf20a6e7/b128e251-4781-4c5f-b509-c01b4f9291e8.pdf
[iv] Poulin, G.N. (2014, December 1). Sino-Israeli economic ties blossoming. The Diplomat. Recovered from https://thediplomat.com/2014/12/sino-israeli-economic-ties-blossoming/
[v] United Nations Statistics Division. (s.d.). A Comtrade Plus. Consulted https://comtradeplus.un.org/
[vi] Trading Economics. (2025). China Exports to Israel. Consulted https://tradingeconomics.com/china/exports/israel#:~:text=Login,2024 (Trading Economics)
[vii] Observatory of Economic Complexity (OEC). (s.d). Bilateral trade profile: Israel – China. Recovered from https://oec.world/en/profile/bilateral-country/isr/partner/chn
[viii] Zhou, L. (2024, 6 juin). For China-Israel ties, the “honeymoon is certainly over”, policy expert says. South China Morning Post. Recovered from https://www.scmp.com/news/china/diplomacy/article/3265517/china-israel-ties-honeymoon-certainly-over-says-policy-expert
[ix] Institute for National Security Studies (INSS). (s.d.). China and National Infrastructure in Israel: Past the Peak. Tel Aviv: INSS. (Analysis citing the warning of Shin Bet leader and detailing the risks of spying and influence). INSS
[x] Reuters. (2019, 15 janvier). United States warns Israel against Chinese investment in Haifa port. Reuters. https://www.reuters.com/article/us-israel-china-usa-idUSKCN1P92FG
[xi] Ravid, B. (2020, 21 December). United States warns that investing in Israeli technology could pose a security threat. Axios. https://www.axios.com/2020/12/21/chinese-investment-israeli-tech
[xii] Haaretz. (2019, 30 octobre). Israel establishes a committee to oversee foreign investment in strategic sectors. Haaretz. https://www.haaretz.com/israel-news/business/2019-10-30
[xiii] The Jerusalem Post. (2020, 26 mai). Under US pressure, Israel attributes the Sorek-2 desalination project to IDE Technologies. The Jerusalem Post. https://www.jpost.com/israel-news
[xiv] INSS – Institute for National Security Studies. (2023). Sino-Israeli relations tested against strategic rivalries. Tel-Aviv: INSS. https://www.inss.org.il
[xv] Ministry of Foreign Affairs of the People’s Republic of China. (2023, 9 October). Statement by China calling for an immediate ceasefire and humanitarian assistance to Gaza. https://www.fmprc.gov.cn
[xvi] Central Bureau of Statistics (CBS). (2025). Israel’s foreign trade in 2024: China remains the main supplier of imports. Jerusalem: CBS. https://www.cbs.gov.il
[xvii] Arms Control Association. (2001, septembre). Israel cancels radar deal with China. Arms Control Today.
Recovered from https://www.armscontrol.org/act/2001-09/israel-cancels-radar-deal-china
[xviii] Hadar, L. (2025, 30 août). Sino-Israeli relations drift subtly but surely: US pressure pushes Israel to distance itself from China in the technological field. Asia Times. https://asiatimes.com/2025/08/china-israel-relations-in-subtle-but-certain-drift/
[xix] Zhang, J. (2021, 5 août). China-Israel relations at a crossroads. GIS Reports Online.
Recovered from https://www.gisreportsonline.com/r/israel-partnership-china/
[xx] Action on Armed Violence. (2024, 12 avril). Who is arming Israel? Other global exports to Israel. AOAV.
Recovered from https://aoav.org.uk/2024/who-is-arming-israel-other-global-exports-to-israel/
[xxi] Hussain, Z. (2024, 3 octobre). How top arms exporters have responded to the war in Gaza. SIPRI – Stockholm International Peace Research Institute.
Recovered from https://www.sipri.org/commentary/topical-backgrounder/2024/how-top
[xxii] Arms Control Association. (1999, novembre). Mixed U.S. signals on Israel-China deal. Recovered on 23 October 2025 from https://www.armscontrol.org/act/1999-11/mixed-us-signals-israel-china-deal
[xxiii] Xinhua. (2024, 25 janvier). China supplies no weapons, equipment to Palestine-Israel conflict areas: defense spokesperson. China Military Online. https://eng.chinamil.com.cn/VOICES/16283100.html
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