This month, Israel’s National Security Council (NSC) will present the cabinet with its recommendations on foreign investments in Israel. Because of the sensitivity of the issue, no one in the cabinet is prepared to talk about the elephant in the room. Nevertheless, it is clear that the policy review and the report are primarily focused on China.
In the past decade, Beijing has increased its economic and military investments and interests in the Middle East, including Israel. The Israeli government ignored China’s behavior for too long, but lately it has begun to pay attention. The National Security Council has to reconcile two contradictory policies, both of which are important to the Israeli economy and its national-security interests.
The first is a policy embraced by all government across the political spectrum for decades: encouraging foreign investment, privatization of national assets and utilities, and the expansion of international markets for Israeli goods. In recent