Chinese private security companies (PSCs) are increasingly going global. Not so long ago they focused mostly on providing bodyguard services for China’s rich and famous, and guarding facilities in China. But now, China’s growing global footprint has driven this sector to start operating beyond China’s borders.
China has had a private security sector since the mid-1990s when a small number of PSCs were set up to provide services domestically. These companies operated in legal limbo until the sector was legalized in 2009 with the passing of the Regulation on the Administration of Security and Guarding Services. Since then, the sector has boomed. It is estimated that in 2018 there were over 5000 PSCs in China. The vast majority still operate exclusively in China, but some are now starting to provide their services abroad. In 2016 there were reportedly about 20 Chinese PSCs operating in the international market.
The BRI drives the internationalization of private security companies
The main driver behind this internationalization is the Belt and Road Initiative (BRI). Involving some 65 countries and an estimated US$900 billion of planned investments around the globe, the BRI has substantially expanded China’s global economic presence, often in unstable countries where risks are high. Be it providing maintenance for power plants in Iraq, developing infrastructure in Pakistan or drilling for oil in South Sudan, they face a growing number of threats - from transnational terrorism to anti-Chinese sentiment.
In many of these countries, Chinese companies feel inadequately protected by local security forces - a perception that is underlined every time a Chinese worker is kidnapped or attacked while working on a BRI-linked project. In Pakistan, home to the China–Pakistan Economic Corridor (CPEC), the flagship project of the BRI, attacks have already cost the lives of at least 44 Chinese nationals since 2014, including two teachers and an employee of a shipping company.
Until a couple of years ago, Chinese companies operating overseas often hired well-known international security giants, such as G4S or Control Risks. Chinese PSCs were seen as too inexperienced, and their services as inadequate, given that most Chinese PSC employees are unarmed when abroad. But while these limitations remain, Chinese companies are increasingly turning to Chinese PSCs for protection overseas.
The reasons for this shift include the language and cultural barriers faced when working with non-Chinese staff as well as financial considerations, since international alternatives tend to be substantially more expensive. Some contractors estimate that a team of 12 Chinese guards might cost the same as a single US or British guard.
Beijing encourages Chinese companies abroad to hire homegrown private security companies
But the most important reason is that the Chinese government reportedly encourages Chinese companies operating abroad to hire homegrown PSCs for their security needs. Beijing knows that it must protect its citizens from the risks they face when going overseas to follow its policy priorities. But it is reluctant to deploy the People’s Liberation Army (PLA) for protection. That would mean an official abandonment of China’s long-standing non-interference policy and it could lead to serious international backlash. As a result, Chinese private security companies have turned into a good alternative.
Despite their nominally private status, Chinese PSCs are mostly staffed by former PLA soldiers with close, if indirect, ties to Beijing. They therefore operate with the tacit support of the Chinese government. As a result, Beijing can keep an eye on what these companies are doing while still maintaining plausible deniability in case things go wrong.
Examples of Chinese PSCs’ overseas activities are few, as this remains an opaque sector. But over the last few years a handful of instances have made headlines. In the summer of 2016, employees from Chinese PSC DeWe Security were caught in the middle of a clash between warring local factions in Juba, South Sudan while protecting workers from the China National Petroleum Corporation operating in the country. And two years earlier in June 2014, VSS Security was hired to evacuate 1000 Chinese workers from the China Machinery Engineering Corporation based in Iraq who were fleeing from a standoff between Iraqi government troops and the so-called Islamic State.
Chinese PSCs are likely to continue their internationalization through BRI-linked opportunities. This potentially offers a good solution to security concerns in BRI countries - Chinese PSCs could simultaneously secure Chinese interests and improve security conditions in dangerous regions without the direct intervention of Beijing.
But there is a risk that increasingly active Chinese PSCs with little conflict experience - the closely associated PLA has not seen large-scale combat since the brief war with Vietnam in 1979 - may mishandle conflict scenarios. Such a situation would be a political disaster for Beijing, undermining China’s efforts to allay concerns over its international investments and its self-proclaimed intentions to become a responsible global power.
The article was first published by East Asia Forum on October 16, 2018.