A source from the Israeli defense industry says that weapon manufacturers in Israel had already gained support from the prime minister’s office as well as the economic and foreign ministries since it is the policy of the nation to expand its economic and political ties with China. For this reason, various government officials within Israel have welcomed the discussion regarding the change of the regulations.
Export to China of certain dual-use technologies that can be used by both civilians and the military are being discussed, as well as the latest generation of unmanned aerial vehicles. Another source from the defense industry said that the increasing difficulty in selling weapons to Israel’s defense ministry is eroding the profitability of the industry, which makes China crucial to the nation’s economy.
Israel had earned US$7.5 billion in 2012 with the Asia-Pacific region as its biggest market, despite the limits imposed on Israel by Washington in selling defense and dual-use technology to China and other countries in the region. To deal with China, defense firms in Israel must get approval from the defense ministry’s Defense Export Controls Agency, which includes foreign and economic ministry officials.
Under pressure from the United States, Israel has also regulated arms sales to India, Russia and many other East European nations. In 2010, the United States blocked state-owned Israel Aerospace Industries from bidding on a contract to upgrade India’s jet fighters despite the fact that US companies were bidding as well. Meir Shalit resigned from his position as head of defense exports at the nation’s defense ministry for selling military equipment to China after US protests.
The US government worries that the hardware Israel provides China may be useful for Iran in developing its own ballistic missiles. Media stated that gaining permission from Washington to sell weapon systems to sensitive countries is not currently on the top of the agenda for Jerusalem because it is now holding strategic talks with the US on developing and financing new weapons systems, however, Israel is still trying to win tacit consent from the United States regarding the issue.