Since the start of the war in Gaza between Israel and Hamas, China has adopted a somewhat surprising position. Beijing has historically supported the Palestinian cause but maintained substantial ties with Israel since the two established diplomatic relations in 1992. Over the years, China has condemned Israeli settlement-building in the occupied Palestinian territories and even sought to bar its citizens from involvement in those activities. Nevertheless, it has continued to maintain significant economic relations with Israel.
However, after Hamas’ attack on Oct. 7, China’s response surprised some observers, both in Israel and beyond. To begin with, Beijing refused to explicitly condemn Hamas, which it has not formally designated as a terrorist organization. And a week after the attack, at a time when Israel’s backers in the West were still supportive of its military campaign in Gaza, Chinese officials stated that Israel’s airstrikes had “gone beyond self-defense” and condemned them as “collective punishment,” while Chinese media outlets blamed the U.S. for the conflict. In the weeks thereafter, Beijing’s official communications about the war consistently pointed to the establishment of a Palestinian state as the only sustainable resolution to the Israeli-Palestinian conflict. Israel reacted by expressing “deep disappointment” in the Chinese response and objecting to China’s insistence on the need for a two-state solution under the current circumstances.
To explain China’s position, many observers have argued that Beijing is merely seeking to appeal to audiences in the Global South, where public perception of the conflict largely favors the Palestinian cause. There is undoubtedly some truth to that. Beijing has long sought to position itself as a development model for and geopolitical leader of the nations of the Global South. But, in line with China’s pragmatic foreign policy approach to the Middle East, Sino-Israeli cooperation has in the past continued to deepen regardless of Beijing’s concern for the Palestinians. And Beijing has never issued such blatant condemnations of previous Israeli military campaigns in Gaza or southern Lebanon.
So, what is driving China’s shift regarding the current conflict? One overlooked factor is the relative collapse of the major pillar underpinning Sino-Israeli ties since even before they formally established diplomatic relations: trade in technology, and particularly in military technology.
China and Israel: A Technological Relationship
China has long purchased Israeli high-tech military hardware and invested in Israel’s technology sector, including the acquisition of Israeli firms. Indeed, Israeli experts have contended that Israel’s appeal to China as a partner was in no small part due to Beijing’s interest in in the Israeli technology sector, with Yoram Evron pointing out in 2013 that “[t]echnological ties between Israel and China have always been a central and constant element of their relationship.”
According to a Rand Corporation study, between 2011 and 2018, Chinese firms were prolific investors in the Israeli tech sector, both in the total amount invested—$5.9 billion—and the number of deals made. These investors included Chinese firms accused of having deep affiliations with the Chinese state and military, including Huawei and ZTE. The study acknowledges that a key factor driving Chinese investment was that, at the time, Israel had virtually none of the oversight regimes for technology investment that its Western counterparts had already established.
For example, in the U.S., the Committee on Foreign Investments in the United States, or CFIUS, is tasked with approving investments made in the U.S. to make sure they don’t pose a national security concern. As part of its functions, CFIUS monitors whether foreign investment in or acquisition of technologically sensitive U.S. firms may empower actors hostile to the United States. In one case, it even forced a Chinese company to sell off Grindr, a dating application oriented to the LGBTQ+ community, reportedly because it feared that the personal data of U.S. citizens in positions of power could be used for blackmail.
One overlooked factor driving China’s shift on the Israel-Palestine conflict is the relative collapse of the major pillar underpinning Sino-Israeli ties: trade in technology, and particularly in military technology.
Israel’s technology sector is heavily integrated into the Western technology world. Israeli firms cooperate with their U.S. and European counterparts, receiving investment and technology from them and conducting joint research together. Starting in the 1960s, U.S. and European firms began setting up research offices in Israel, and U.S. venture capital funds have offices in Israel that funnel investment and managerial expertise into the country’s tech sector. These extensive ties were extremely appealing to Chinese investors who were viewed skeptically by Western technology hubs and their governments. As one scholar said, Chinese firms are still interested in “Western-style technologies,” and amid increasing tensions with the West, “the only option is Israel.”
But the Israeli tech sector’s ties with its Western counterparts, and particularly the U.S., eventually created obstacles in Sino-Israeli tech cooperation. There is a very long history of the U.S. and Israel tussling over Israeli sales to China of technologies that include U.S. technology and know-how, with two episodes serving as particularly illustrative examples.
In 1999, a planned sale of Israeli Falcon early warning aircraft to China fell apart under strenuous pressure from Washington. And in 2004, after China returned Israeli-made Harpy drones to Israel for upgrades, the Pentagon demanded they be confiscated. Eventually, Israel shipped them back to China, but without making the upgrades, leaving both Washington and Beijing dissatisfied. In both cases, U.S. criticism and diplomatic pressure stemmed from the fact that Israel was exporting technology to China that was either developed in the U.S. or that heavily included U.S. technology in its development.
These disagreements became even more intense in recent years, as Sino-American tensions spiked and the defining of technologies as military-in-nature or dual-use became far more complicated, particularly with the proliferation of still-developing technologies—like artificial intelligence—that can be difficult to place within the context of that traditional categorization.
As a result, the U.S. began to lean more heavily on Israel to institute greater safeguards against the involvement of Chinese firms in its tech sector. Even after Israel installed an inbound investment regime in 2019, it was seen by U.S. officials as deficient. Across both the Trump and Biden administrations, Washington continued to emphasize the need for greater scrutiny and information-sharing around Chinese involvement in Israel’s tech sector, leading Beijing to declare that any move by Israel to align itself with U.S. technological export and investment restrictions would be a “critical test point” for Sino-Israeli relations. When Israel went ahead and approved a tightening of such controls, China was understandably displeased.
Ultimately, 2018 seems to have been the high-water mark of Sino-Israeli technology cooperation. Since then, Chinese involvement has dropped dramatically since.
Israel: Caught Between the U.S. and China
U.S. efforts to impose limits on the Sino-Israeli relationship were not limited to the tech sector. They also involved pressuring Israel to pull back from pursuing deals with China on infrastructure and desalinization projects. Israel found itself caught between its primary partner and a rising power. But since the U.S. is not only a major aid donor to Israel but also its military protector and a far more important economic patron than China, including in the technology realm, the outcome was never in serious doubt.
In hindsight, the escalation of Western tensions with China and China’s own domestic technological growth made the break almost inevitable. With Israel having now pulled back on engagement with China, particularly in the realm of technology, the key attraction of Sino-Israel cooperation for Beijing has been removed, and the effect is on display in China’s response to the ongoing war in Gaza.
Only time can tell whether this is a meaningful long-term shift for Beijing. But as China is now seeking a greater diplomatic role in the world, especially in the Middle East, its more pro-Palestinian bent will certainly trouble Israel.
Ali Ahmadi is an executive fellow at the Geneva Centre for Security Policy and an analyst at Gulf State Analytics. His work focuses on sanctions and economic statecraft.