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In early November, Miao Qiang, the CEO of SIPG Bayport Terminal, operator of the new Haifa Bay Port, described the challenges of working in Israel, with an emphasis on disagreements between the Israeli government and Haifa municipality. When asked why his parent company, SIPG of Shanghai, had chosen to bid for the Bay Port in Haifa rather than for the Southern Port in Ashdod, he explained: “Because of the relationship between Haifa and Shanghai – twin cities since 1993 – we decided to bid to operate the Bay Port.” In another interview he added that Yona Yahav, then mayor of Haifa, contacted the mayor of Shanghai, urging him to persuade the company to participate in the tender. In China, he explained, the concept of “twin cities” is taken much more seriously than in Israel.

As in other matters, here too it is important to learn from China, and more important, to learn about it.

Twin city alliances are intended to promote cooperation for the benefit of the cities and their populations in areas such as trade, tourism and business, culture, sport and art, science, and technology. According to the website of the Federation of Local Authorities in Israel, the formation of such alliances is under the authority and at the discretion of the local authority, with the expectation that they will inform the Federation and the Foreign Ministry. Twenty years ago the State Comptroller already pointed out gaps in the government’s supervision of local authority activities relating to twin cities, and between the Foreign Ministry and the Interior Ministry on this matter. Even then there was a problematic picture of irregular activity of little benefit, together with problems of proper governance and unnecessary expenditure. But when it comes to municipal relations with Chinese cities, there are other particular and complex dimensions to the situation.

Ashdod on the Silk Road?

Ashdod is an interesting example of the development of local government relations with China and their complexity. Early in the previous decade, Ashdod entered into a twin city alliance with the city of Wuhan, which has since become famous as the origin of COVID-19. Relations between the cities, with the encouragement of the Chinese Embassy in Israel, included exchanges of delegations and memorandums of understanding on matters of business, economy, and culture. In 2014, an agreement to build the Southern Port in Ashdod was signed between the Israel Ports Company and Pan Mediterranean Engineering Company (PMEC), a subsidiary of China Harbour, in the presence of then-Prime Minister Benjamin Netanyahu, the Ministers of Transport and Finance, the Mayor of Ashdod, and the Chinese Ambassador in Israel, Gao Yanping. In the following years, contacts between the Chinese Embassy and the Ashdod municipality were nurtured with visits to the city by Ambassador Gao, Military Attaché Zhang Su, and a delegation from the city of Ningbo, as well as visits to China by senior officials from Ashdod.

In the summer of 2018, a framework agreement to include Ashdod in the Belt and Road Initiative was signed in Beijing, between representatives of the Ashdod municipality, led by Yehuda Frankel, and Xie Yang Jun, head of the Silk Road program in the International Cooperation Center (ICC) of the National Development and Reform Commission (NDRC). The NDRC is a central government commission with ministerial status, whose role is to implement the policies of the Central Committee of the Communist Party on matters relating to economic and social development in China, including promoting the Belt & Road Initiative (“the Silk Road of the 21^st century”), China’s strategic infrastructures initiative.

In late 2018, Ashdod Mayor Dr. Yehiel Lasry opened the first meeting of the 11th City Council with a festive announcement of his forthcoming visit to China “to sign a memorandum of understanding between the People’s Republic of China and the city of Ashdod, on economic cooperation and huge investments, amounting to hundreds of millions of dollars, which will make Ashdod a center for Chinese commercial activity in the Mediterranean basin.” “This move”, he said, “will bring to the city huge resources and extensive investments, creating a giant leap forward in the infrastructure, employment, and strategic positioning of Ashdod.”

In April 2019, the local press in Ashdod reported that the City Council was presented with a memorandum of understanding signed by the mayor and Huang Yong, CEO of NDRC-ICC, stating that China would construct two commercial towers of 60 floors and another five buildings of 22 floors for international hi-tech companies. In addition, a large logistics center would be built behind the port, the incorporation of an elevated monorail would be examined, and the feasibility of building a hi-tech industrial park and a free trade zone behind the Port would be considered. Both parties undertook to maintain confidentiality regarding the details of the agreement, and the president of CSCCEC – one of the world’s largest building contractors, owned by the Chinese government – and his team met the city engineer and his team to take the plan forward. The mayor published a celebratory short video in which he praised the new Silk Road initiative and the many benefits it would bring to Ashdod and its residents. The icing on the cake, he said, would be an academic complex, including Chinese and Israeli universities, three from each side. Interestingly, the proposal to set up a Chinese academic institution was also presented to the Mayor of Modiin in 2017, and was ultimately implemented in 2021 with the opening of an extension of the Chinese UIBE University in Petah Tikva, after  approval by the Council for Higher Education and the City Council. The large plan for Ashdod has not progressed, and has apparently been frozen, but it is an important case for understanding the complex interface between local government and foreign governments, which spills over from the municipal level into the area of foreign and security considerations at the national level.

What is the Problem?

On the surface, all is well. The Ashdod municipality worked to promote projects to bring prosperity to the city with partners from China, within the bounds of its municipal authority, and with the blessing of the Israeli government at the time. But the matter is more complicated, and the strategic environment has changed over the years. The root of the matter is the basic asymmetry between a local authority in Israel, and urban and regional authorities in China, which are extensions of the central government. The asymmetry does not lie solely in size and resources, but also in responsibility and authority, in purpose and method, and in knowledge. For the Ashdod municipality this was an urban real estate, transport, and technology project, an important source of employment, prosperity, and revenue. For China, this is a municipal relationship that is also a business opportunity for private and government Chinese companies, as well as a platform for promoting the objectives of the ruling party and its foreign policy.

The Belt and Road Initiative, launched by China’s President Xi in 2013 as a global enterprise to develop infrastructures and connectivity, has since then acquired a negative reputation in the West, and is today identified by many as a strategic tool for China to increase its influence in other countries, and is perceived as a red flag in the United States. Last April the federal government in Australia canceled the Belt and Road agreements signed by the State Government of Victoria with the Chinese Government, citing “harm to the national interest.” Thus the very joining by a local authority in Israel of the Belt and Road Initiative spills over from the field of purely local government into the realm of foreign policy. In other words, the construction of a logistical infrastructure behind a port with military components, i.e., next to a strategic facility, necessarily is within the purview of national security.

Moreover, in the hi-tech park in the south of Ashdod, where the project with China was planned, in March 2021 the cornerstone was laid for the Elbatech plant, a company partly owned by ELTA, which specializes in manufacturing technologies for aircraft, hi-tech, and military industries. The proximity of foreign projects to security industries also goes beyond the scope of local government and is the responsibility of the security establishment. Similar considerations of sensitivity apply to all matters relating to communications infrastructures, surveillance, and urban command and control, such as those used in smart cities, which on the one hand enable the advanced management of urban resources, but on the other hand embody risks to privacy and the security of data and information. Another worrisome point is the demand raised both in Ashdod and in Haifa to maintain the confidentiality of the agreements between public bodies in Israel and companies from China, since it is doubtful if there is any material justification for this.

Ashdod is not the only example. Before the outbreak of COVID-19, Israeli local authorities conducted various activities with China, including visits, exchanges of delegations, sister-city twinning, and designation of the Israel-China Year of Friendship, as part of relations between the countries. Most of these activities involve the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC), which is described by local government sources in Israel as “an arm of the Chinese Foreign Ministry” and “the equivalent of the Federation of Local Authorities in Israel.” But the government structure in China is very different from that in Israel, not only in the names of entities, but also in their purposes and ways of operation, which are not really equivalent.

Just as other governments promote companies from their countries, the Chinese government is keen to ensure the success of Chinese companies worldwide, and works to assist them with the range of tools at its disposal: diplomatic, economic, business-related, intelligence, and political, at the central government level but also at the regional and municipal level. In 2011, when the railway to Eilat was on the agenda, representatives of the Chinese Transport Ministry met then-Mayor (today Knesset Member) Meir Yitzhak Halevy. The Chinese Development Bank (CDB), which proposed financing the project, and Shaul Bitterman, who represents the Chinese companies in Israel, suggested twinning Eilat with the city of Yinchuan. The advice was accepted and the alliance was signed. Ultimately the project did not materialize for economic reasons, but the combination of political, economic, diplomatic, business, party-political, and municipal efforts to promote it is impressive and merits attention.

As shown by studies and reports from the United States, Europe, and Australia, China is working with local authorities all over the world to promote its interests and establish ties and influence over circles of government, in the interface between elected public figures, government officials, and business people. Local government represents an important center of gravity for achieving long term influence, at both the municipal and national political level.

Professor Anne-Marie Brady of New Zealand, an expert on Chinese politics, describes the growing use under the Xi Jinping presidency of relations between peoples, political parties, and sister cities in order to enlist foreigners in the service of Chinese foreign policy objectives and to promote its economic agenda, while bypassing the foreign policies of central governments in the target countries. The body responsible for this activity is the same CPAFFC, which is part of the “united front” system, the array of influence of the Chinese Communist Party on non-party audiences inside and outside China. One of its tasks is to rally foreigners for China’s benefit and to obtain technology from abroad.

The importance of local government does not end at the municipal level, because of its close links with the national level. In China itself, party officials advance along career paths that include jobs in both local and central government, and even in Israel, quite a few ministers and members of the Knesset started out in local government. Local government is very active in national party organizations, and in the corridors the Knesset and in government ministries. Thus contacts with senior officials in local government offer both sides the potential for establishing ties with future senior members of the national government, but in China, unlike Israel, the foreign relations of local government are closely supervised and guided by the central government.

Conclusion and Recommendations

Contacts between cities and local government play a desirable role in Israel’s important relations with China – promoting municipal interests and deepening ties between peoples in areas such as culture, art, and more. However, it is important to remember that Israel and China perceive these relations in a different way, they are handled differently by entities that are not comparable in size, and they are part of different national strategies. Fruitful long-lasting relations must be handled in a professional, transparent way that is understood by participants and the public and agreed on by both sides. Just as China manages its local government connections with the world under the supervision and guidance of the central government, Israel must ensure that the foreign relations of its local authorities do not encroach on its national foreign and security policies.

Projects and business activity in Israel depend to a large extent on government elements, at both central and local levels, and on regulations, decisions, and budgets. Local government is vital to the success of projects, due to its powers to determine land usage and manage the surrounding space. It is important to identify and understand the links between contacts at the local government level and large-scale business activities and projects, some of which have national security aspects. The Chinese modus operandi combines efforts to work with people from businesses, government, and political parties in Israel, and the Israeli government must adopt a similar inclusive view of “friendship” activities and soft diplomacy, in addition to activity to promote business and infrastructure.

There is an evident need for a national map of all existing twin city relationships, synchronizing and updating existing data by the Foreign Ministry, the Federation of Local Authorities, and the municipalities themselves, for comparison with government records in China, orderly documentation of activities and agreements to date, and systematic and frequent monitoring of developing connections, agreements, and projects. The Foreign Ministry is likely the appropriate body to coordinate and update this information, involving its headquarters in Jerusalem and its representatives in China, as a bridge between municipal authorities in China and in Israel. This process will make it possible to identify important projects and issues that have aspects relating to foreign policy and national security, and in turn bring them to the attention of the proper authorities, who can ensure that a broad national approach to managing foreign policy at the local level as well.

There is likewise a need for clear guidelines from the Foreign Ministry and the Interior Ministry for local authorities, regulating their powers to sign international agreements, and an obligation for local authorities to report to the government wherever necessary. The establishment of a forum of twin cities should be considered, including the Federation of Local Authorities, the Foreign Ministry, representatives of the relevant municipalities, and others as applicable, in order to provide updates, guidance, and policy emphases.

In addition to guidance at the policy level, the people involved in managing foreign relations in local authorities need specific training, knowledge, and awareness. Everyone involved in the process, both senior and junior, must be familiar with the unique characteristics of their overseas partners, and not assume that there is full equivalence between themselves and their counterparts. Regarding China, it is important to understand the significant differences between the two countries, which go beyond differences of language and culture and penetrate deep into the structure of governments, their objectives, and the methods used. There is a need to prepare training material and guidelines and arrange professional training – for elected officials in local government, employees engaged in this subject, diplomatic staff who promote foreign relations at the local city level, and for the businesspeople involved.

Transparency in the field of foreign relations in local government is another important component of proper management and the prevention of undesirable outcomes that are sometimes hidden behind a veil of confidentiality. Apart from the circle of national government, special attention must be directed to Israeli businesspeople and former senior members of government who work as consultants, lobbyists, or brokers to promote business interests involving international elements, or even on behalf of foreign governments. Due discovery by them and by their employers is a vital safeguard for preventing conflicts of interests and other unwelcome occurrences.

An abridged version of this article was published in Haaretz on May 5, 2022.