Chinese water torture: 6 things to know for May 26

1. Water pressure: After seemingly attempting to avoid the US-China trade war like the plague (the other plague), Israel has seemingly dived right in, giving the tender for a massive desalination plant dubbed Sorek B to Israeli company IDE rather than the Hong Kong-based CK Hutchison.

  • Walla news reports that the interministerial panel that awarded the tender said the bid by IDE “included the unprecedented price of NIS 1.45 per cubic meter of water, some 65 agorot less than the cheapest water available today.”
  • Nonetheless, the awarding of the contract to IDE, owned by Israeli tycoon Yitzhak Tshuva, and not CK Hutchison, founded by Li Ka-shing, is widely viewed as the result of American pressure.
  • “After strong pressure by the Trump administration Israeli Finance Ministry decides against giving the tender for building the huge desalination plant “Sorek 2” to Hutchison a Chinese-Controlled company,” tweets Barak Ravid of Channel 13 and Axios, who has followed the story closely.
  • Many reports note that it was less than two weeks ago that US Secretary of State Mike Pompeo jetted all the way to Israel for a quick chat, and made no secret of the fact that the US wanted Israel to get out of China’s sphere. Reports indicated that Israel had specifically told Pompeo that it would reconsider awarding the tender to Hutchison.
  • “During Pompeo’s visit to Israel, he warned that Chinese investments in infrastructure could pose a security risk. The Chinese Embassy in Israel responded that they trust that Israel will ‘defeat the coronavirus but also the “political virus,” and choose the course of action that best serves its interests,’” notes Haaretz.
  • The Ynet news website reports that Pompeo’s “sudden” visit was merely the apex of ongoing pressure against the deal.
  • Israel Hayom notes that “in an interview to Israel Hayom prior to his arrival, Pompeo criticized the Chinese for their handling of the coronavirus crisis. However, both sides deny that this had anything to do with the bid for the desalination plant.”

2. Anti-China syndrome: Kan reports that the move came after both “significant pressure” from the Americans, and opposition from Israeli security actors, though it does not specify what the Israeli opposition was or who specifically opposed the Chinese involvement.

  • The Ynet news website reports that the Shin Bet warned Israeli officials on several occasions about giving foreigners access to non-defense contracts.
  • “In most cases, the Shin Bet recommended against selling assets like this to the Chinese, which sometimes involved sharp battles with the foreign and economy ministries over the role China should play in Israeli companies,” the site reports. “The Shin Bet sees China as an actor with a high potential for spying. Thus for instance, they thwarted attempts by the Bank of China to build Israeli networks, and the trend of investing in Israeli high-tech companies.”
  • (Unmentioned by Ynet, or really any coverage, is the role Hutchison and Li Ka-Shing have played in Israel’s high-tech scene. Hutchison already owned one of Israel’s largest cellular networks, Partner, and Li Ka-shing has made many investments in Israel through his Horizons Ventures VC, though those have slowed in recent years.)
  • The Globes business daily notes that US was already “dissatisfied with Chinese involvement in building and operating major Israeli infrastructure projects including the new Haifa and Ashdod ports and the Tel Aviv light rail Red Line.”
  • Speaking to ToI’s Raphael Ahren recently, Clarice Witte of the Sino-Israel Global Network & Academic Leadership nonprofit said that China long ago lost the battle with the US over Israel, but that doesn’t mean investments and positive ties cannot continue.
  • “Israel already has a side. There is no choosing here. And China knows it,” she said in a wide-ranging email interview. “China realizes that the joint US-Israel development of military technology and the US financial backing for military equipment, as well as the US veto in the UN Security Council, are things that China will not be providing.”
  • Bloomberg notes that Israel isn’t the only country wrestling with these issues: “The Israeli government’s decision to choose a domestic bidder is the latest blow to CK Hutchison Chairman Victor Li, two years after his bid to buy a gas pipeline operator in Australia was blocked on national security concerns. The CK group’s overseas acquisitions and projects have been central to its push to diversify from its mainstay businesses of telecommunications, retail, property and ports.”

3. Don’t be a Sorek loser: The move comes just days after Israel created a water and higher education minister, giving Ze’ev Elkin a chance for a victory lap.

  • Walla quotes him saying the tender awarding is a “historic event,” and the plant will provide Israel with “confidence in the strength of our water resources” even should a series of drought years ensue.
  • Energy Minister Yuval Steinitz, who until last week had the water resources portfolio under his aegis too, also tries to make sure he gets credit, with Walla quoting him saying that he is the one who pushed a plan two years ago to double Israel’s water capacity. “This desalination plant that’s going ahead today, which will be the biggest of its kind in the world, is the result of the implementation of that plan.”
  • Speaking to Kan, Steinitz also appears to push back against the claims that the choice was dictated by Washington. “The bid by the Israeli firm was better, by a significant margin, the price was cheaper, by a significant margin than that of the other bidders – including the Chinese, who did indeed reach the final stage,” he says, according to Reuters.
  • Globes notes that “back in 2010, IDE and Hutchison teamed up to win the tender for the first Sorek desalination plant but IDE was forced to leave the partnership in order to bid for Sorek B. Globes revealed last year that in running Sorek A both companies had hidden data about excessive salinity in the water produced by Sorek A. The desalination plant was forced to provide the state with NIS 75 million worth of free water but the courts dismissed a petition to disqualify IDE and Hutchison from the Sorek B tender.”

4. It’s a date: Perhaps not by coincidence, the other major topic of Pompeo’s discussion, Israeli plans to annex parts of the West Bank, is also in the news.

  • According to several reports, Prime Minister Benjamin Netanyahu told his Likud faction during a closed-door meeting that he was sticking to the July 1 date for starting work on annexation. In public comments, Netanyahu said he would not let the opportunity to annex pass him by.
  • A seemingly jubilant Israel Hayom, which has pushed for annexation, blasts the July 1 date on its front page along with the proclamation “On the way to sovereignty.”
  • In a news story penned by reporter Ariel Kahane, the paper notes that work remains to be done and a number of challenges still stand in the way of actually making it happen, with vociferous international condemnation of the plans just one of them. While it says the Americans are too busy with the coronavirus to really care what Israel does, it also quotes an American source familiar with the matter chiding the settlers for not backing the Trump plan.
  • “If the settlers aren’t interested in what the administration has to offer them now, they shouldn’t come to us later. They should look at the wider picture and remember where they were in December 2016, and think about where they can be in four years if the Palestinians continue to refuse talks with Israel.”
  • In a column, Kahane echoes both Netanyahu’s words and the American official he quotes wholeheartedly.
  • “With all due respect to these concerns, the ministers, the MKs, the decision-makers, and actually all of us as citizens, need to focus on what is important. The Trump vision is a one-time opportunity that won’t repeat itself. We should take note of what American officials are telling the Israeli Right: If they torpedo the offer, don’t come to us again,” he writes.

5. Annexation when? In recent days even Trump administration officials have appeared to seek to dampen expectations that Washington will quickly green-light the move without any progress in negotiations between Israel and the Palestinians.

  • Others also express doubts about July 1 being a realistic date. Walla reports that security sources say Netanyahu’s date is impossible, and he may have to make do with a meaningless pronouncement.
  • “According to the sources, the time frame is too short, since it requires significant preparations on the ground, including planning for a deterioration in the security situation in the West Bank and Gaza,” the news site reports.
  • “Is there comprehensive work on the ground being done on the significance of annexation and sovereignty? The legal, economic, security, administrative, international significance? Has there been a single strategic conversation between policy-makers, the intelligence community, the planning division and anyone else involved? Or is this just another helter-skelter hormonal outburst that we will regret in 40 years,” asks Kan’s Gal Berger on Twitter.
  • Speaking to Kan, Labor Party minister Itzik Shmuli says he’ll be doing what he can to make sure annexation does not go ahead at any date. “Our ability to delay this process is a lot greater from inside the government,” he says.
  • Despite the fact that they don’t have a veto over the matter (and Netanyahu can draw support from Yamina and Yisrael Beytenu in the opposition) Haaretz’s Akiva Eldar expresses confidence that Blue and White’s Benny Gantz and Gabi Ashkenazi, both former IDF chiefs, will stymie annexation.
  • “They put together with Netanyahu a clause in the coalition agreement according to which extending sovereignty in the West Bank be conditioned on maintaining regional stability and peace accords, and on striving for a future peace deal. Anyone with a brain knows that unilateral annexation of the Jordan Valley will contribute to regional stability and peace deals just as much as a regional war would contribute to stability and peace,” he writes.
  • Army Radio reports that Maj. Gen. Kamil Abu Rukun — the coordinator of government activities in the territories — told army chief Lt. Gen. Aviv Kohavi and Defense Minister Gantz that annexation “was likely to lead to a wave of terror attacks and a breaking of security cooperation [with the Palestinian Authority].”

6. In the poorhouse: With the announcement that Israel’s economy shrank by over 7 percent in the first quarter of 2020, thanks to the coronavirus pandemic, there is a focus on how the disease has struck Israelis in their pockets.

  • Yedioth Ahronoth, which leads off its print edition on the poor economic news, says that “like the virus itself, it seems there is no cure on the horizon for now.”
  • The paper’s Sever Plotzker notes in a column that Israel has actually weathered the economic storm better than some big European countries, but its staggering unemployment figures should be a cause for much worry: “Even by the second half of May, employment is down 30 percent compared to the start of the year.”
  • Channel 12 news reports on a survey that finds almost half of Israelis fear not being able to cover expenses and 14.1 percent are worried that they will lose their homes. That same exact number is the percent who said that they or a member of their household forwent at least one meal a week due to the virus and money issues.
  • May 27 will mark the day when restaurants and other types of businesses still closed can get back to business, but Army Radio reports that many will still not be able to, given their debts and onerous health guidelines.
  • “I’ve got nothing,” says the owner of one such joint in Jerusalem to Army Radio. “We didn’t get any grants, we took out loans. It is what it is that we are left without money, the problem is we’ll be left with debts.”

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