Aligning U.S.-Israeli Cooperation on Technology Issues and China

Washington, March 9, 2022—The United States and Israel have a long history of working together as close allies. In recent years, however, the United States and Israel have differed regarding their threat perceptions and approaches to China. Whereas Israel sees China primarily as an economic partner and is increasing trade with the country, the consensus view in Washington increasingly sees China as a global strategic challenge—militarily, economically, and technologically—even while the Biden administration preserves space for cooperation with Beijing in areas of common interest.

In the new CNAS paper, Aligning U.S.-Israeli Cooperation on Technology Issues and China, authors Jonathan Schanzer, Shira Efron, Martijn Rasser, and Alice Hickson outline a framework that seeks to address the multidimensional challenge presented by China. This paper represents the most comprehensive public analysis to date of the challenges facing U.S.-Israeli cooperation on issues related to technology and China.

The authors contend that for the United States and Israel to align their policies and bridge differences they must focus on three central areas:

• Working groups. The United States and Israel should establish a high-level working group to coordinate U.S. and Israeli policy on technology and China. This group should include a consultative structure and deeper systemic engagement between the U.S. and Israeli private sectors academia, legislatures, and intelligence and law enforcement bodies.
• Regulatory regimes. The United States and Israel should align their regulatory regimes, especially regulations regarding investment screening from China, to ensure their high-tech industries are defended from potential exploitation. This process should include regular dialogue between U.S. officials at the Treasury Department, which serves as the chair of the Committee on Foreign Investment in the United States, Israeli treasury officials, and experts from a newly established committee responsible for investment screening in Israel.
• Economic and technology cooperation. The United States and Israel should deepen economic and technology cooperation as a counterweight to and substitute for Chinese investments. This process should begin with a regular high-level U.S.-Israel dialogue that brings together the key agencies responsible for innovation in both the U.S. and Israeli governments. The United States should also encourage greater U.S. private-sector investment in the Israeli technology sector as a substitute for Chinese investment and should encourage other democratic partners to do the same.

This paper is only a first step toward addressing these challenges, but it is already apparent that simultaneously aligning strategy, regulation, and economic cooperation is the most effective way for the United States and Israel to deepen their cooperation on this complicated problem set.

For more information or to schedule an interview with the report authors, please contact Cameron Edinburgh at cedinburgh@cnas.org.