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The U.S. factor in Israel's military relations with China
Yitzhak Shichor, Jamestown Foundation, China Brief
7/19/2005

The Jerusalem-Beijing-Washington imbroglio over Israel's sale of Harpy UAVs (Unmanned Aerial Vehicles) to China that surfaced in December 2004 is by no means over. Yet, while it is too soon to mourn the untimely death of Israeli arms sales to China, it is nonetheless becoming clear to all parties concerned that these controversial military transfers seem to have reached a dead end and have practically been suspended. Even if the deal goes through (an unlikely possibility), Israel will probably not resume its arms supplies to China in the foreseeable future – though not because of mutual unwillingness. On the contrary, the two parties are eager to continue their relationship. But it is Washington that for the last fifteen years has gradually forced Israel first to limit and then to stop altogether its military transfers to China. This staged pressure reached its climax with the killing of the Phalcon AWACS deal five years ago. However, it has apparently failed to deliver the message. Using the Harpy as an aftershock, the U.S. seems to be promoting an uncompromising policy prohibiting all transfers to China of goods, services and technology – military and civilian – produced by Israel's defense industries. This policy effectively squelches Sino-Israeli military relations.

Produced by Israel Aircraft Industries (IAI), Harpy is a 500 km-range delta-wing lethal UAV with a day and night capability designed to detect, attack and destroy radar emitters with a very high hit accuracy. Launched from a ground vehicle behind the battle zone, Harpy is an all-weather autonomous weapon system that can effectively suppress hostile SAM (surface-to-air-missile) and radar sites for a long duration. Like the Phalcon, Harpy does not incorporate U.S. technology. Indeed, when the Sino-Israeli Harpy UAV deal, negotiated in the mid-1990s, was reported to the U.S., Washington – while upset by the deal – did not explicitly object. By 1999, Israel had reportedly sold China about one hundred Harpy UAVs for about $55-70 million. Unlike the aborted Phalcon deal (valued at $250 million-$1 billion), the Harpy deal is relatively small given Israel's total arms sales of about $15 billion in 2000-2004.

The deal was not exposed until 2002. In July, the Washington Times reported that several Harpy drones had been spotted during a PLA military exercise in southern Fujian province, opposite Taiwan. There was no mention of any U.S. objection to the deal but earlier U.S. accusations against Israeli arms sales to China were immediately recycled and later integrated into the 2004 Report to Congress of the U.S.-China Economic and Security Review Commission published in June. According to Israel's Defense Ministry, its accusations were based on "erroneous information." Sources in the Israeli Embassy in Washington claimed that Israel does not require a license to export Israeli technologies and that the U.S. is perfectly aware that Israel's export control is among the best in the world, and all the U.S. technologies in its possession are well protected. Furthermore, the sources underlined that Israel acceded to a U.S. request by suspending all negotiations to export weapons and military equipment to China in January 2003.

In 2003, Israel agreed to a Chinese request to renew its Harpy "spare-part inventory" and duly informed Washington. Harpy components probably arrived in Israel in August 2004. Washington, which had grudgingly agreed to the deal in the first place, could hardly oppose China's request. Provisions of overhaul, maintenance, spare parts and training are usually and legally covered by after-sale services of any transaction, military or civilian. Yet, by December 2004 Washington had come to believe that Harpy components were returned to Israel not for "spare part replacement and routine overhaul" but for upgrading. This upgrading may have included advanced technologies and sensors that could detect radar emitters even after they are switched off. Developed after the Harpy had been sold to China, these technologies have been incorporated in a new Harpy model, reportedly sold to Taiwan. Moreover, the Pentagon must have been concerned that joint U.S.-Israeli technological achievements related to an even more advanced model, would be leaked to the Chinese.

The Pentagon's surprise and consequent accusation against Israel for misleading the U.S. and for withholding information, therefore, came as a result of the upgrading, not the original sale. The upgrading was considered a threat to Taiwan (and the Seventh Fleet), representing a separate deal that has never been authorized. As such, it should have been reported to, and approved by, the U.S. – according to understandings reached with Israel in 2000, following the Phalcon controversy, and certainly in view of Israel's January 2003 decision to suspend all military export contacts with China and to assure Washington that it would not sell any item to China that could harm U.S. security. While Israel regarded the Harpy upgrading as an integral part of the earlier deal, reached before these understandings were agreed on, Washington insisted that Israel should not only stop the upgrading process but, furthermore, confiscate Chinese-owned UAV components.

The short-term outcome of this dispute is not yet clear, but the long-term implications are already evident. In this triangular relationship, Washington represents the independent variable whose uncompromising policy toward China is being systematically consolidated. Trying to prevent a European breach of the arms embargo imposed on the PRC after the Tiananmen 1989 confrontation, Washington can by no means approve Israeli military sales to China. Moreover, because of its overwhelming dependence on the U.S., Israel is a much easier prey compared to Europe. Actually, six months before the Harpy crisis erupted, the U.S. had reportedly blocked the direct participation of Israeli defense firms in security tenders for the 2008 Beijing Olympic Games. This fits into Washington's policy of containing Beijing, especially in view of the U.S. perception of the dangerous combination of China's accelerated military modernization, increased political authoritarianism and continued violation of human rights.

Indeed, China represents a dependent variable in this triangular relationship, apparently with little room to maneuver. State Counselor and Deputy Prime Minister Tang Jiaxuan who arrived in Israel heading a large delegation on December 25, 2004, soon after the crisis erupted, warned the U.S. against meddling in Beijing's affairs. However, his reaction was rather tempered and he hardly touched on the Harpy issue in public. In fact, official China has been remarkably quiet and restrained on the Harpy issue – unlike its response to the Phalcon affair that immediately and seriously affected Israel's military, diplomatic and economic activities in China. For one reason, upgrading the Harpy UAVs is a relatively small deal and China already keeps most if not all of the drones. It is only a question of time until the Chinese develop their own version of sophisticated lethal UAVs, if they have not already. The Israeli-made UAVs and most other arms acquisitions from abroad (with the possible exception of Russia – but including Europe) are primarily a quick fix. Also, unlike the Harpy affair, the Phalcon affair involved a public loss of face for former president Jiang Zemin who was personally promised to get the Phalcon. But the most important reason is China's ultimate realization that Israel has no choice.

Lu Jing, the political affairs counselor at the PRC Embassy in Tel Aviv, told The Jerusalem Post on February 3, 2005 that Beijing's more forgiving and understanding response to the Harpy affair is the outcome of a learning process. "We have realized that what happened with the [Phalcon] plane is not only the fault of the Israeli government … There were some external factors involved as well. We have to look forward, not backward. This relationship is mutually beneficial for both countries." Now, he added, we attempt "to put ourselves in your boots. We were more tolerant this time around … We never scolded the Israeli side. We just wanted to let the issue resolve quietly and not let it damage the bilateral ties. I can't say we are satisfied, but while last time we publicly expressed our outrage, this time we kept everything in. We learned a lesson and didn't want to turn it into a big issue. This is only one aspect of our relationship." Numerous Chinese Internet comments have been less understanding and displayed strong anti-American sentiments, disbelief in Israel's dependence on the U.S. and even criticism of Chinese officials' shortsightedness. One comment said: "A small brother is a small brother. He should obey his big brother in everything. One day, when Israel needs Chinese help, we shall firmly say ‘no'!" Indeed, unofficial Chinese sources said that if the UAVs were not upgraded according to earlier Sino-Israeli agreements, China would apply sanctions against Israeli companies both in China and in Hong Kong.

Finally, Israel is an even more dependent variable in this triangular relationship. For all of its irritation about Washington's behavior, from now on it would be very difficult – if not impossible – for Israel to sell China any kind of arms or technology of defense industrial origin. Last March, before leaving on a visit to the U.S., Israel's Defense Minister Shaul Mofaz warned CEOs of some fifty of Israel's leading defense firms that they need written permission for any business negotiations with China or even for visiting China. After meeting U.S. Secretary of Defense Donald Rumsfeld, Mofaz admitted that the Harpy upgrade deal with China might be abandoned under U.S. pressure. Also, earlier in the year Japan's Foreign Minister Nobutaka Machimura asked the Israeli Foreign Minister Silvan Shalom to end arms sales to East Asia. He meant China.

The inevitable outcome of the Harpy crisis will be an end to Israeli arms sales to the PRC. Negotiations concerning the upgrade deal could drag on for several months but ultimately, barring a reversal of events and a dramatic change in Washington's strategic thinking about Beijing, the China market is lost for Israel's defense industries for the foreseeable future.

Yitzhak Shichor is Professor of East Asian Studies and Political Science at the University of Haifa, and Senior Fellow, the Harry S Truman Research Institute for the Advancement of Peace, the Hebrew University of Jerusalem, Israel.

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