March 2018

China received relatively low attention within the Mediterranean media in March. Of the articles that were published, business with China was the center focus. However, a few also revealed how China's expanding economic presence in the region has caused some involuntary discomfort, at least in Israel and Yemen.

In Israel, debate concerning the role of Chinese companies within the real estate and construction sectors continues to develop. Some argue that there are political motives behind China’s expanding presence. While others have noted that Chinese companies offer lower prices and better services compared to their Israeli counterparts. However, some of these companies have been targeted by police investigations and have committed irregularities in the bidding process. For example, the China Railway Electrification Bureau, known also as EEB, won the bid for the electrification and the construction of the Tel Aviv light railway, having put forward an offer of ILS 2.5 billion offer against a ILS 6 billion offer put forward by Thales. According to a Globe interview with an employee of one of the agencies tasked with helping Chinese companies enter the Israeli market, the Israeli public is becoming unnecessarily suspicious about Chinese companies. Yehuda Bar-On, the CEO of NTA, the Tel Aviv government-funded company in charge of the design and construction of public transportation, stated that Chinese and Israeli companies are actually well matched in terms of expertise and strengths. He further added that in the future local Israeli companies will be unable to manage and execute all projects within the country alone, and, therefore, Chinese companies can play a positive role in the economy. The Calcalist reported that in response to this issue, the Israeli government recently approved 5-years visas for 6000 Chinese workers.

With regards to Yemen, China seems to be caught up in the tensions between the Yemeni government and the United Arab Emirates over the development of the Port of Aden. The Yemeni President Abd Rabbo Mansour Hadi visited Beijing on March 13 and offered to allow China management over the Port of Aden. The previous contract it had with the Emirates based DP World was scrapped in 2012 due to allegations of corruption, nepotism and misconduct. According to the Qatari media outlet Sasa Post, the Yemeni government hopes to quickly develop the port following DP World’s failure to fulfill its obligations in terms of investment and expansion of the facilities that were previously defined in the 2008 agreement. A Yemeni official interviewed by the Post accused DP World of deliberately stalling negotiations with other international partners to prevent direct competition to the Port of Dubai. Saeed Almara, who heads the labor union within the Port of Aden, argued that there is a risk that the UAE will spare no effort in trying to disrupt the agreement between China and Yemen. The UAE could ask US officials, who dislike the idea of another port within the region falling under Chinese control, to put pressure on Yemen and block everything. In 2013, the China Harbour Engineering Company signed an agreement with the Port of Aden for the expansion and deepening of the Aden Container Terminal. At the same time, DP World was terminated from its work on Djibouti's Doraleh Container Terminal. Instead, China Merchants Port Holdings was granted a contract to expand the terminal to accommodate container and bulk cargoes.

The cooperative agreement between Iran and China for the construction of the Shiraz - Bushehr railway line was less controversial. Iran will provide up to 15% of the total investment. The construction of lines that will connect Shiraz to Gol Gohar, Gol Gohar to Kerman, Kerman to Bandar Abbas, as well as Kerman to Chabahar is also under consideration. At the same time, the leadership of the Confédération Générale des Entreprises du Maroc (CGEM) and the China Council for the Promotion of International Trade (CCPIT) agreed to set up the Council for Belt and Road Affairs, as had been previously decided in 2017 by the governments of both countries. The volume of trade between China and Morocco has grown by 50% over the last three years, and Moroccan exports increased by 70%.

‍