There are two interesting U.S. angles to the recent spate of high-level defense contacts between Israel and China. The first has to do with the respective roles each country plays in the domestic U.S. discourse, with Israel universally portrayed as the United States' most stalwart ally and China increasingly portrayed as our most likely future peer competitor. This Manichean view is especially pronounced among the Tea Party and Christian Zionist wings of the GOP, but is also present in moderate Republican and Democratic circles. So it will be interesting to see how a closer defense relationship between the two plays out in terms of impact on their respective domestic images. I suspect China's image will tarnish Israel's in the event the relationship progresses, but it could have the opposite effect, with Israel serving to rehabilitate China's image as bogeyman.
The second has to do with "leading indicators" of actual decline in U.S. influence, both in the Middle East and worldwide. It's safe to assume that the recent Israel-China contacts have been approved in Washington and that any cooperation that comes out of them will require a similar green light. But that might not always be the case. There are all sorts of historical and geographic reasons why Asian states have an incentive to bandwagon with a rising China. But if Israel and, more generally, other Middle Eastern powers (like Saudi Arabia) begin to do the same, it will be a very unforgiving signal of declining confidence in U.S. staying power. Another one along these lines is the European Union's arms embargo against China, which by all accounts faced a very serious challenge last year.