Israel was the first country in the Middle East to recognize the PRC as the legitimate government of China. However, China did not establish normal diplomatic relations with Israel until 1992. Since then, Israel and China have developed increasingly close commercial, military and strategic links. Israel maintains an embassy in Beijing and is planning to open a new consulate in Chengdu, its third in mainland China. China is Israel's third largest trading partner globally, and largest trading partner in Asia. Trade volume increased from $50 million in 1992 to over $10 billion in 2013. The similarities between the cultures and values of the two nations, sharing of deep ancient roots as well as convergence of economic interests has served two respective countries greatly with respect economic, diplomatic and cultural ties. In addition, China is one of the few countries in the world to concurrently maintain good relations with Israel, Iran, Palestine, and the Muslim world at large.
For some time after the 1949 Chinese revolution, the People's Republic of China was diplomatically isolated, because the United States and its allies (including Israel) recognized the Republic of China (commonly known as Taiwan) as the legitimate government of China. During the 1955 Asian–African Conference, China expressed support for the Palestinian right of return, but refrained from denying Israel's right to exist and secretly pursued trade ties with the Israelis. Until the 1980s, China refused to grant visas to Israelis unless they held dual citizenship and carried a passport of a country other than Israel. However, following the Sino-Soviet split and China's 1979 establishment of diplomatic relations with the United States, China began to develop a series of secret, non-official ties with Israel.
China and Israel secretly began building military ties in the 1980s during the Soviet war in Afghanistan, which both Israel and China opposed. They both supplied weapons to the Afghan mujahideen (Israel sending captured PLO weapons via the United States and Pakistan), and military cooperation between the two began in order to assist the Islamic resistance against the Soviets. China and Israel subsequently started exchanging visits of delegations of academics, experts, businessmen and industrialists. Reportedly, a large number of the heavy tanks used in China's 1984 National Day parades were retrofitted by Israel from captured Six-Day War equipment.
China eased travel restrictions, while Israel reopened its consulate in Hong Kong (then under British administration), which would serve as the main point for diplomatic and economic contact between the two nations. In 1987 Israel’s Prime Minister, Shimon Peres, appointed Amos Yudan to set up the first official Government owned company (Copeco Ltd) to establish and foster commercial activities between companies in China and Israel. The company was active until 1992, when official diplomatic relationships were announced between Israel and China.  In the early 1990s, China joined a number of nations who established ties with Israel after the initiation of a peace process between Israel and the PLO in the early 1990s; it also desired to play a role in the peace process.
Prior to the establishment of full diplomatic relations in 1992, Israel and China established representative offices in Beijing and Tel Aviv, which functioned as de facto embassies. The Israeli office was formally known as the Liaison Office of the Israel Academy of Sciences and Humanities. This was opened in June 1990. China was similarly represented by a branch of the China International Travel Service, which also opened in 1990.
Prime Minister Benjamin Netanyahu visited China in May 2013 and five agreements were signed during his visit. The G2G (Government to Government) mechanism was established and five task forces were set up in high tech, environmental protection, energy, agriculture and financing. Netanyahu visited China again in 2017 amid celebrations taking place to commemorate 25 years of ties between the two countries.
Development of bilateral relations
In November 1991, the Defense Minister of Israel Moshe Arens was reported to have paid a secret visit to China and believed to have negotiated the establishment of ties and expansion of military cooperation. On January 23, 1992, the Foreign Minister of Israel David Levy paid a four-day visit to Beijing, preceding the formal establishment of ties. Both nations had maintained some trade links, which stood at USD 30 million in 1992. Since then, the annual growth in trade has averaged 40%. Bilateral trade rose to USD 3 billion in 2005 and is projected to rise to USD 5 billion by 2008 and USD 10 billion by 2010. China is Israel's largest Asian trading partner and has sought Israel's expertise in solar energy, manufacturing robotics, irrigation, construction, agricultural and water management and desalination technologies to combat drought and water shortages. In turn, Israel has imported high-tech products and manufactured goods from China. There are more than 1,000 Israeli firms operating in China as of 2010. In particular, Chinese firms play an essential role in the $10-billion kosher foods industry, with 500 factories across China producing kosher food for the American and Israeli markets.
Zev Sufott, who had served in the liaison office of the Israel Academy of Sciences and Humanities in Beijing beginning in 1991, was appointed as Israel's first Ambassador to China upon the establishment of diplomatic relations in 1992.
In 2007, Israeli Prime Minister Ehud Olmert (whose father was raised in the northern Chinese city of Harbin, whose Jewish community dated from the 19th century  ), visited China to bolster trade and military cooperation and seek China's support in the conflict over Iran's nuclear proliferation. In June 2012, Olmert's successor, Binyamin Netanyahu, planned to visit China to mark the 20th anniversary of the establishment of bilateral relations, but the visit was cancelled.
As part of the 2010 World Expo, the Shanghai Municipal Government began to allow the city's Jewish community to use the historic Ohel Rachel Synagogue for regular Shabbat services. The Israeli consul Jackie Eldan noted that the gesture was a "special effort", as the synagogue is now located within the compound for the city's education ministry, and that it was "truly highly appreciated by Israel”. Following the event, however, such services were discontinued and the site is now only available during the High Holy Days.
Despite the increasingly close relationship between the two countries, China also maintains strong relations with Palestine. In 2012, China voted in favor of UN General Assembly Resolution 67/19 to grant Palestine non-member observer status in the United Nations.
Israel and China began extensive military cooperation as early as the 1980s, even though no formal diplomatic relations existed. Some estimate that Israel sold arms worth US$4 billion to China in this period. China has looked to Israel for the arms and technology it cannot acquire from the United States and Russia. Israel is now China's second-largest foreign supplier of arms (following Russia). China has purchased a wide array of military equipment and technology, including communications satellites. Growing military cooperation and trade has softened China's historic anti-Israeli policy. China is a vital market for Israel's military industry and arms manufacturers. Israel has also limited its cooperation with the Republic of China (Taiwan) in order to foster closer ties with the People's Republic of China.
The US Defense Intelligence Agency compiled evidence that Israel had transferred missile, laser and aircraft technology to China in the 1990s. Israel was set to sell China the Phalcon, an airborne early-warning radar system, until it was forced by the United States to cancel the deal.
On 19 October 1999, the Defense Minister of China, Chi Haotian, flew to Israel and met with Ehud Barak, then-Prime Minister and Defense Minister of Israel. They reached several high-level agreements, including a $1 billion Israeli-Russian sale of military aircraft to China. On 25 May 2011, the Commander of the People's Liberation Army Navy, Admiral Wu Shengli, made an official visit to Israel, meeting with Barak and Rear Admiral Eliezer Marom.
On 14 August 2011, General Chen Bingde, Chief of the People's Liberation Army General Staff Department, made an official visit to Israel, scheduled for three days. He came a guest of the Israeli Chief of Staff Benny Gantz, who received him with an honor guard at the Kirya military headquarters in Tel Aviv. The visit came after Defense Minister Ehud Barak’s visit to China in June, the first visit of a defense minister to the country in a decade. Bingde’s visit was part of a tour that included stops in Russia and Ukraine.
On 13 August 2012, vessels from the PLA Navy's 11th escort fleet, led by Rear Admiral Yang Jun-fei, anchored at Israel's Haifa naval base for a four-day goodwill visit to mark 20 years of cooperation between the Israel Defense Forces and the PLA. The vessels and crewmen were welcomed by the Haifa base commander, Brigadier General Eli Sharvit, and Chinese embassy officials.
More than 1000 Israeli start-up companies have set up operations in China. Israel’s open, innovative and risk-taking approach to high-technology as well as Israel's rapid economic rise towards a high-tech superpower has been appealing to the typical Chinese entrepreneur, as the concept of risk taking is not deeply rooted in China's culture with its approach to failure. With the increasing economic cooperation between the two countries, China is spearheading an increasing number of partnerships with Israeli universities such as the Tel Aviv University and Tsinghua University’s $300 million joint research center, a $130 million donation to the Technion, and a program devoted entirely to teaching the Israeli business culture at Peking University. Politicians are also hastening to increase the cooperation between the two countries with former Israeli Economy Minister Naftali Bennett recently visiting China to launch the Israeli Business Center in Shanghai, an initiative that goes hand-in-hand with the China-Israel Joint Committee on Innovation Cooperation, a three-year action plan to strengthen innovation cooperation.
On 3 July 2011, Israel and the People's Republic of China signed an economic cooperation agreement to boost trade between the two countries. According to Eliran Elimelech, Israel’s commercial attaché in Beijing, the agreement was expected to deepen ties between Israeli and Chinese businessmen in the short term, and in the medium to long term to improve trade conditions between the countries. In January 2011, the Israeli Central Bureau of Statistics stated that Israeli exports to China had grown by an annual 95 percent in 2010 to $2 billion.
In September 2011, the Israeli Minister of Transport, Israel Katz, stated that China and Israel were discussing the construction of a high-speed rail link joining the Mediterranean Sea with the Red Sea. This joint project would permit the mass overland transport of Chinese goods to Israel and Eastern Europe, and would involve both Chinese and Israeli railway developers. The following month, the Chinese and Israeli governments signed a memorandum of understanding regarding the joint construction of a 180-km (112-mile) railway linking the Israeli city of Eilat with the Negev Desert's Zin Valley, Beersheba, and Tel Aviv. In August 2012, with Sino-Israeli trade growing, the Beijing University of International Business and Economics in Beijing set up a department dedicated to studying Israeli economics and Judaism, while some Chinese universities began offering Hebrew courses. The group SIGNAL has established an exchange network of Chinese and Israeli scholars and academics. Since 2012, Israel began increasingly engaging trading partners in Asian markets such as China, India and Japan to combat flagging trade growth with Europe as well as facing less political pressure attached to those partnerships. Furthermore, many European countries often utilize their strong economic clout to exert political pressure on Israel with regards to the Israeli-Palestinian and the West Bank settlements.
Bilateral trade between the two nations increased from $50 million to $10 billion in 2013. Since 2013, Chinese investors have begun to show a growing interest in Israeli firms. Recent high end deals include Chinese donation of $130 million to Technion for a research center, Beijing winning a $2 billion tender to build the “Med-Red” railway linking Ashdod port with Eilat as well as a $1 billion Israeli port tender, a $300 million joint research center between Tel Aviv University and Tsinghua University, and Chinese acquisition of a controlling stake in Israel’s Tnuva dairy company for more than $1 billion. The acquisition of Tnuva was the biggest Chinese buyout of an Israeli company since 2011 when the China National Chemical Corp. bought Adama, the pesticides and crop protection company then known as Makhteshim Agan, for US$2.4 billion. In 2014, Chinese-Israeli tech deals totaled $300 million, up from $50 million in 2013, according to Israel’s National Economic Council. Bilateral between the two countries reached in excess of $10 billion in trade since the start of 2015. In January 2015 a number of Chinese information technology companies began to make investments in Israel, Chinese e-commerce giant Alibaba invested an undisclosed sum in Visualead, an Israeli company specialising in QR code technology. Alibaba has also invested in Israel-based venture fund Jerusalem Venture Partners, becoming a limited partner joining Qihoo 360, another Chinese web company to have invested in the Jerusalem-based fund. Baidu, China’s largest search engine, has put US$3 million into Pixellot, an Israeli video capture start-up and provided funds to Carmel Ventures, an Israeli venture capital firm as well as lead a $5 million investment round in the Israeli music education firm Tonara.
In March 2015, Israel joined China’s newly constituted Asian Infrastructure Investment Bank (AIIB), becoming a founding member of the institution suggesting that Israel may become a major economic ally of China. In 2013, China and Israel began to boost the economic relations with respect to agriculture. The two countries decided to set up an agriculture technology incubator in Anhui Province, China enabling joint development of agriculture technologies and solutions in keeping with requirements on the ground. Israeli agriculture trade fairs such as Agrivest and AgriTech have witnessed large Chinese delegations and greater participation from Chinese state-owned and private companies as Chinese's growing middle class and increasing consumer demand as well as increased pressure on agricultural land has prompted the Asian giant to increasingly look at Israeli agriculture technology to boost crop yields and dairy production. Horizons Ventures, a venture capital fund founded by Hong Kong business mogul Li Ka-shing, said on April 28, 2015, it is leading a US$10.8 million strategic investment in Windward, an Israeli maritime data and analytics company. MarInt, Windward’s satellite maritime analytics system, is widely used by many security, intelligence and law enforcement agencies across the world. With his investments in Israeli high-tech, Li has set the stage for Hong Kong's business elite that it was financially sound and even necessary for the future of the Chinese economy's prosperity to invest in emerging Israeli technologies. In the first half of 2015, China invested more than $2 billion compared to just $300 million for all of 2014. Economists are forecasting China to surpass the US as Israel’s largest trading partner in the near future. On May 25, 2015, the Israeli Trade Authority signed an Authorized Economic Operator (AEO) agreement that simplifies customs and approval procedures for Chinese exporters to Israel. On June 22, 2015, The Delek Group agreed to sell a 52% controlling stake of its company to the Chinese civilian-run conglomerate Fosun International. On September 2 2015, Fosun International made another investment in Israel where it agreed to purchase the Ahava cosmetics firm for NIS 300 million ($77 million USD).
Criticism and controversies
Israel's increasing defense cooperation with China has caused concern in Western nations, particularly the United States, which is the largest foreign supplier of military equipment to Israel. Owing to strategic rivalry against Chinese rivals in Asia such as Japan, South Korea, the Philippines, India, and Vietnam and concerns over the security of Taiwan, the United States has pressured Israel against selling sophisticated equipment and technology to China. In 1992, the Washington Times alleged that exported American Patriot missiles and Israel's indigenous Lavi jet aircraft technology had been shared with China, although official U.S. investigations did not substantiate these charges. In 2000, Israel cancelled the sale to China of the Israeli-built Phalcon Airborne Warning and Control System (AWACS) in the wake of pressure from the U.S., which threatened to cut off US$2.8 billion in yearly aid if the deal went through. Israel's decision drew condemnation from China, which stated that the cancellation would hurt bilateral ties. China’s record of proliferating arms and weapons systems has also concerned U.S. planners, as the U.S. worries that China may repackage advanced Israeli defense technologies for resale to America’s rivals and nations hostile to it throughout the world.
Despite close relations between the two nations, China and Israel continued to remain divided on the issue of Palestine, Israeli settlements in the West Bank and East Jerusalem, economic blockade of Gaza, and the Israeli West Bank barrier wall. China has criticized Israel's construction of settlements in the West Bank and East Jerusalem. China’s then Foreign Minister Li Zhaoxing called the Israeli West Bank barrier wall an obstacle to peace in a September 2006 statement during a UN Security Council meeting on the Middle East. In November 2008, then China Ambassador to the United States Yesui Zhang stated that the "continued construction of settlements on the West Bank is not only in violation of Israel's obligations under international law, but is also detrimental to guaranteeing Israel's own security." According to analysis from the Jamestown Foundation, China's policy on Israel and Palestine is based on soft power diplomacy, and maintain a balancing act between its Israeli and Arab world ties. On June 8, 2015, China demanded Israel to refrain from placing Chinese migrant construction workers from building Israeli settlements in the West Bank. China raised this concern as the West Bank ban is due to a concern for the Chinese workers’ safety in areas beyond the Green Line, which marks Israel’s pre-1967 borders. The government of Israel has been eager to negotiate a deal with China completed in the hope that an influx of foreign workers will increase the rate of housing construction in Israel and reduce the costs of new homes.
After the victory of Hamas in the 2006 elections in Gaza, China acknowledged Hamas as the legitimately elected political entity in the Gaza Strip despite Israeli and U.S. opposition. The Chinese government met with senior Hamas representative Mahmoud al-Zahar, who previously served as Palestinian foreign minister, during the June 2006 China-Arab Cooperation Forum in Beijing which held direct bilateral talks despite protests from Israel and the United States. A spokesperson for the Chinese Foreign Ministry stated that "the Palestinian government is legally elected by the people there and it should be respected." Besides the Chinese recognition of Hamas, China also does not designate Hezbollah as a terrorist organization.
In 2012, the families of eight Israeli terror victims of the 2008 Mercaz HaRav massacre in Jerusalem filed a $1 billion lawsuit against the Bank of China. The suit asserted that in 2003 the bank's New York branch wired millions of dollars to Hamas from its leadership in Syria and Iran. The Bank of China subsequently denied providing banking services to terrorist groups: "The Bank of China has always strictly followed the UN's anti-money laundering and anti-terrorist financing requirements and regulations in China and other judicial areas where we operate." The case was later settled in which Israel won the lawsuit in July 2014.
Chinese involvement in the Israeli technology sector has also generated security concerns. The former head of Mossad, Efraim Halevy, is one of the major critics in Israel who believes that the country should examine the geopolitical considerations with China and has consistently warned the Israeli government against involving the Chinese in the Red-Med project, arguing that it could lead to a crisis in strategic relations with the United States. Other critics argue that growing Chinese involvement will endanger Israeli security and lead to theft of Israeli technology to be utilized in Chinese espionage further arguing that Israel should balance its burgeoning relations with China with maintaining a balance of relations with the United States at the same time.
In 2010, the United Nations Security Council passed Resolution 1929, imposing a fourth round of sanctions against Iran for its nuclear enrichment program. China ultimately supported this resolution, although initially, due to the strong bilateral relations and nuclear cooperation between the China and Iran, China opposed the sanctions. According to the New York Times, Israel lobbied for the sanctions by explaining to China the impact of any per-emptive strike on Iran would have on the world oil supply, and hence on the Chinese economy.
After the May 31, 2010 Gaza flotilla raid the Chinese Foreign Ministry spokesman Ma Zhaoxu strongly condemned Israel. On April 28, 2011 after the rival Palestinian factions Fatah and Hamas formed a national unity government, Chinese Foreign Ministry spokesman Hong Lei said that China welcomed the internal reconciliation. During the November 2012 Operation Pillar of Defense in the Gaza Strip, the Ministry of Foreign Affairs of the People's Republic of China urged all sides to display restraint. On November 29, 2012, China voted in favor of UN General Assembly Resolution 67/19 Palestine to non-member observer state status in the United Nations. On June 3, 2014, China recognized the Palestinian unity government between Hamas and Fatah.
On July 23, 2014, with the United States being the only nation opposing the establishment an investigation by the United Nations Human Rights Council into war crimes committed in Gaza during Operation Protective Edge, China was the among 29 nations voted in favor of the investigation by the UNHRC of war crimes committed by Israel. In addition, Chinese Foreign Ministry Spokesperson Hong Lei earlier on 9 July 2014 issued a concerned response to the violence during the military operation said: "We believe that to resort to force and to counter violence with violence will not help resolve problems other than pile up more hatred. We urge relevant parties to bear in mind the broader picture of peace and the lives of the people, immediately realize a ceasefire, stick to the strategic choice of peace talks and strive for an early resumption of talks."
According to a 2013 Pew Research Centre Poll, 38% of Israelis view China as having a positive influence. In relation to the previous poll, 33% of Chinese have a negative view of Israel while 32% of Chinese view Israel positively.
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