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The New Haifa Bayport Terminal: Are U.S. Concerns over China Justified?

(Institute for National Security Studies-Tel Aviv University) Galia Lavi and Brig.-Gen. (ret.) Assaf Orion - Sep. 1, 2021, marked the start of operations in Haifa of the SIPG Bayport Terminal, owned by the Chinese company Shanghai International Port Group. A 2011 report on the cost of living and competition in Israel found that the productivity at Israel's outdated seaports was 15-25% lower than elsewhere in the Mediterranean, imposing unnecessary annual costs of hundreds of millions of shekels on the Israeli consumer. Israel's outdated ports lack adequate container capacity and are unsuitable for huge container ships. Some cargo must be moved from a large ship to a smaller ship that is able to anchor in Israel. In response, the Israeli government decided to construct two new private container terminals near Haifa and Ashdod to operate alongside the existing ports. Some in the U.S. argue that Bayport's management by a Chinese state-owned company is a provocative symbol of treacherous cooperation with America's arch-rival. The fact is that the port operator is a private Israeli company, indeed owned by a Chinese company, yet most of its employees are Israelis, apart from a few Chinese management staff. Bayport is subject to Israeli law, and in emergencies must operate according to the instructions of the Israeli security authorities. The port's eight cranes, made by the Chinese company ZPMC, are technology-rich machines equipped with sensors and communications, raising concerns that they could be used for espionage. ZPMC manufactures 70% of these advanced cranes in the world. This year, ZPMC cranes were purchased by ports in San Francisco and South Carolina. According to reports, the subject of China never came up in the Aug. 27 meeting between President Biden and Prime Minister Bennett. Israel signed the contract for the Bayport terminal in 2015, before Washington's official declaration in 2017 of the era of Great Power Competition with Beijing. A considerable part of the criticism of Israel derives from judging past decisions according to present conditions, and from echoing unexamined claims. Galia Lavi is a research fellow and coordinator of the Israel-China program at INSS, where Assaf Orion is a senior research fellow.
2021-09-13 00:00:00
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