A Huawei company logo is seen at Huawei’s Shanghai Research Center in Shanghai, China, May 22, 2019. Photo: REUTERS/Aly Song.

The US and Israel should establish a new bilateral interagency working group on China to prevent a crisis and enhance the potential for technological partnership, according to the Institute for National Securities Studies (INSS) and other security experts.

“There is this US sense of China as this global strategic rival that is seeking to acquire other countries’ innovative technologies to often use them for repressive and aggressive purposes such as surveillance and censorship,” said Daniel Shapiro, former US Ambassador to Israel and INSS visiting fellow at a virtual INSS conference Thursday. “So there has been an increasing US expectation that allies like Israel will take these US concerns into account even if that means limiting certain opportunities. That started really to play out during the Trump administration.”

“Many Israeli technology companies are aware of the sensitivity and are starting to be cautious about taking Chinese investments. There has been a decline in Chinese investments in Israeli technology. They are worried about losing access to the US market,” said Shapiro at the conference, “Aligning US-Israel Cooperation on Technology Issues and China.”

At the same time, Shapiro argued that Washington has not yet been clear about how it defines these newly regulated emerging and foundational technologies under the export controls, and how it expects American companies and its allies to handle them.

“So Israel understandably wants clear guidance from the US on its own rules,” he continued. “The Biden administration still has work to do to establish a comprehensive set of its own rules and a comprehensive set of alternatives for allies like Israel who forego cooperation with China.”

At the conference, the INSS presented some of the public recommendations which will be published in a few months on the proposal of a bilateral interagency on China. The recommendations are the result of a working group with the Foundation for Defense of Democracies (FDD) and the Center for a New American Security (CNAS).

“The US and Israel still have quite different approaches to China and consequently different approaches to the technological competition with China. Israel sees China as an economic opportunity,” said Shira Efron, a senior research fellow at the INSS.

The INSS believes that the bilateral agency should be led both country’s National Security Councils and be divided into three subgroups with defined tasks which will need to meet frequently, proposing ideas as well as recommendations. The three groups would work on strategy, investment regulation and economic and technological issues.

“The US is not going to invest in any country, including Israel, without full security that these investments are not going to spill over to China,” said Jacob Nagel, senior fellow at FDD and a former head of Israel’s National Security Council. “If Israel wants to be among the leaders in the world and cooperate with the US on technologies like 3D, drones, quantum, and cyber, there are things we can’t do with China.”