China's missile-related imports and assistance from Israel have been a subject of particular concern in the United States because of worries that Israel may be providing China with "back door" access to controlled, sensitive US technology. For example, in the early 1990s, reports surfaced that Israel had secretly transferred information on the US Patriot missile system to China, in violation of Israel's promise to the United States not to transfer the Patriot technology to any third country. Although both China and Israel denied the allegations, US government sources concluded that it was almost certain that a transfer of technology (though not physical equipment) had taken place.

China is reportedly using the Patriot technology to improve its surface-to-air missile (SAM) systems and to develop countermeasures against the Patriot for its ballistic and cruise missiles; reports also indicated that China intended to sell these SAMs and enhanced missiles to other countries, possibly including Iran. Reports suggested various Israeli motives for the transfer: some suggested that Israel had traded Patriot information for information on China's missiles; others asserted that Israel's transfer of Patriot technology was intended to encourage China to curtail its sales of ballistic missiles to countries in the Middle East such as Syria and Iran.

In addition to the alleged Patriot technology transfer, Israel has allegedly supplied China with cruise missile technology, including sensitive US technology. Specifically, Israel is allegedly assisting China with the development of its YF-12A, YJ-62, and YJ-92 cruise missiles.

In September 1992, responding to US accusations that Israel sold China Patriot missile secrets, Chinese Foreign Minister Qian Qichen denied "that there had been any kind of military cooperation between Israel and China prior to the establishment of diplomatic relations."

Under U.S. pressure, Israel backed out of a deal with China, potentially valued at $1 billion, in July of 2000. Under the deal, Israel would have outfitted three Chinese Il-76 planes with Phalcon radars. The United States believed the deal would tip the strategic balance against Taiwan. Chinese authorities responded harshly and demanded return of their deposit and compensation. In the Spring of 2002, Israel agreed to pay a reported $300 million to put an end to the dispute over the cancellation.