The Israeli government is hoping thousands of Chinese construction workers will help to alleviate a housing shortage that has driven up prices by more than 50% in the past five years. Officials on Sept. 20 approved a proposal that wlll allow Chinese state-owned staffing agencies to bring in 20,000 workers from China for lower-paying building-trades jobs.

The quota will be in effect for two years and then be reconsidered. It was approved despite the lack of a bilateral agreement with the Chinese government, which Israeli opponents of the deal said was needed to reduce potential corruption and worker abuse.

The bilateral pact failed over China's demand that the workers not be employed on projects in the Israeli-occupied West Bank region, although such work makes up a "tiny fraction" of housing construction, according to The Jeruselem Post.

There are an estimated 6,000 foreign construction workers, about half of them Chinese, currently in the country.

“The decision will boost the supply of apartments in Israel to meet demand and reduce prices,” said Israeli Finance Minister Moshe Kahlon, who spearheaded the move to bring in Chinese workers to fill, at least partially, the shortage.

Studies by Israel's Technion Institute of Technology show that the additional workers will allow construction of 60,000 new housing units per year.

The ministry estimates that the foreign workers will help to reduce by 20% to 30% the average time to construct a high-rise building; currently, it takes about three years to build a high-rise. Officials say this will reduce, on average, contractors’ cost by $12,500 per apartment.

Much of the savings will come from lower wages. Israel’s Central Bureau of Statistics data shows that foreign construction workers earn about half of what Israelis do.

Workers also may be employed to build military camps and transportation infrastructure, according to Israeli business publication Globes.

Israeli contractors welcomed the decision. “If the government is really interested in solving the housing crisis, then this is a step in the right direction,” says Nisim Bublil, president of the Association of Contractors and Builders, the construction-industry trade group that represents most of the country’s contractors. There is currently a shortage of some 70,000 workers in the industry, he notes.

The workforce of the local construction industry comprises 173,000 Israelis, about half of them Israeli Arabs and another 37,000 Palestinians. The Finance Ministry argued against increasing the quota of Palestinian workers, contending the Chinese workers were nearly twice as productive. Further, at a time of heightened tension, Israel is concerned about the security implications of additional Palestinian workers.

But Knesset member Shelly Yachimovitch of the Zionist Union said the decision was akin to slave trafficking, charging it will have a negative impact on the lowest-paid workers in Israel. Kav LaOved, an organization that deals with the rights of foreign workers, said that, based on past experience, the mass use of foreign workers has had no impact on housing prices and that the whole process was open to large-scale corruption.

In a Sept. 20 editorial, The Jerusalem Post said, "Relying on cheap manual labor tends to discourage technological innovation in the construction sector." It said more international competition should be allowed into Israel's building market to "force [the country's] construction firms to increase efficiency."