China’s Private Army: Protecting the New Silk Road

At present, China’s private security companies are evolving from local security enterprises operating at the municipal level in China to international companies able to maneuver abroad in high-risk areas.  Although this evolutionary process is developing at a fast pace, the Chinese market for force along the Belt and Road Initiative (BRI) is quite different from the market that emerged during the Iraq and Afghanistan conflicts.

The BRI, formerly known as One Belt One Road (OBOR), is gaining momentum. Launched by Chinese President Xi Jinping in 2013, the BRI aims to promote economic development and exchanges between China and more than 65 countries. The BRI consists of rail and energy transmission corridors from China to the European Union (the “belt”) and a series of deep-water ports in Asia, Africa, the Middle East, and Europe (the “road”). 

Chinese connectivity is intended to enable the unimpeded flow of goods from China to the EU and as well as to increase Chinese access to trade, energy, and information and communication technology (ICT) connections. While the new Silk Road harkens back to the narrative of ancient trade routes, the BRI is in fact a new array of energy corridors and ICT networks that is being built and managed largely by Chinese state-owned enterprises (SOEs).

One oversight that must be addressed is that the BRI requires a wide range of security services, along both the maritime as well as the land routes. Chinese corporations acknowledge that the risks associated with foreign direct investments (FDI) in emerging economies carry a potentially high failure rate due to several factors, from economic crises to intrastate conflicts.

At the same time Chinese SOEs, due to their public nature and commercial capacity, have a tendency to blur the lines between commercial and political factors. The SOEs tend to rely too optimistically on Beijing’s support in the event of a crisis. Lack of oversight on political risks as well as on criminal violence is quite common in projects assessments along the BRI. While the People’s Liberation Army Navy (PLAN) has already showcased good capabilities in rescuing Chinese workers in conflict zones, such as in Libya and Yemen, it is yet to be seen if minor incidents would require the intervention of the People’s Liberation Army (PLA) or People’s Army Police (PAP).

The central government’s support for the BRI is a long-term guarantee of the Chinese will to sustain infrastructure development and connectivity.  At the same time, however, it does not mean that Beijing is providing indefinite support for unreliable or underperforming projects. In this respect, the notion of “unreliable” in the Chinese context differs from the Western liberal market’s perception of financial viability, expressed as Return on Investment (RoI), for example.

The wide threat spectrum that affects the BRI, with particular reference to the project’s flagship, the $63 billion China-Pakistan Economic Corridor (CPEC), is going to force Beijing to adapt and change its decades-old principle of noninterference. Extreme outcomes could also force Beijing to make radical changes in the initiative but it looks improbable that China will totally abandon the BRI. The political capital that the BRI represents for Xi at home and abroad is a guarantee of Chinese commitment. At the same time, however, the commitment is also a constraint from which it is no longer possible to back out, no matter what.

One of the most relevant issues is the question of how to provide security for Chinese personnel and infrastructure along the BRI. Most analysts tend to measure Chinese influence along the BRI in economic and/or political terms.  Thus, there is a security dimension that is fundamentally different from the conventional notion that a government will send in the army when its nationals encounter security problems overseas.  The killing of three Chinese officers from China Railway in Bamako, Mali by local terrorists in November 2015 or the beheading of two Chinese teachers in Quetta, Pakistan by the self-proclaimed Islamic State in May 2017 did not provoke any direct military intervention from Beijing.

Security and proper risk management are becoming major factors that may determine the success or failure of many elements within the larger BRI project. One of the answers to this problem is that in mainland China there are more than 5,000 private security companies (PSCs) that employ almost 3 million security officers. Beside the numbers, the main issue is competence.

Two compelling questions need to be answered. First, are international and Chinese PSCs a plausible alternative to the Chinese military to provide security to Chinese nationals along the BRI? 

Second, are Chinese PSCs loyal to Beijing or could they actually work in opposition to China’s state interests in protecting assets along the BRI footprint? 

The current regulatory framework and the revolving door from the Chinese army to the Chinese PSCs all but guarantee the their loyalty. In the near future, however, budget increases coupled with the rise of powerful SOEs with their own agendas could affect the reliability and dependability of Chinese PSCs. 

Also, separatism and insurgency are primary variables in the risk assessment equation, but their value is often overestimated because analysts fail to take into account local problems ignited by the influx of Chinese capital and workers. The impact of Chinese infrastructure projects in local communities could alter the internal dynamics of power and wealth, creating a new breed of winners and losers. Security is dynamic, not static.

The debate over whether the BRI is a form of Chinese state-sponsored power projection is still raging, as is the question of whether the BRI is a form of soft power or sharp power. In this contest the PSCs with “Chinese characteristics” play a dual role. The first option is plausible deniability; in case of failure Beijing is not responsible because it was a private undertaking. But on the opposite side of the coin, Chinese PSCs can be perceived as an extension of the PLA. Most of the PSC contractors are former military officers and the CEOs are former officials from the PLA or PAP. This situation creates several scenarios related to the perception of a possible Chinese hidden agenda and indirect power projection. The killing of innocent civilians by U.S. contractors in Iraq — incidents like the Nisour Square massacre perpetrated by Blackwater employees in 2007 — severely undermined the U.S. Army’s efforts to win the heart and minds of the local population. Similarly, possible carnage involving the killing of innocent civilians by a Chinese PSC will compromise the BRI’s win-win narrative.

While China is building a blue water navy capable of enforcing their interests in remote areas, it has yet to be seen whether the SOEs have an agenda to expand their reach in high-risk areas that could force Beijing’s hand in employing hard power. At the same time, professional Chinese PSCs that are supported by the SOEs’ capital abroad could start the build-up of specialized military forces that are not in line with Beijing’s vision. SOEs with their private armies could not only protect their interests abroad but also could leverage their newly acquired capabilities against Chinese internal political power plays.

Today, Chinese PSCs are neither an extension of the PLA nor an armed wing of the Chinese Communist Party (CCP). The message from Beijing is quite clear: Chinese PSCs are not some sort of French Foreign Legion that can be called upon by the PLA when required. 

There are more than 5,000 Chinese PSCs in business today. Of these, fewer than 20 have the capability to operate in foreign countries and most of the time they subcontract international and local contractors. These companies have approximately several hundred to several thousands of unarmed security personnel. Their footprint abroad is still relatively small and Chinese law prohibits them from using weapons outside of China. Two important questions are therefore: when does the number of Chinese personnel in a foreign country become one too many? And will the Chinese law on firearms be changed in favor of allowing PSCs to project more assertive power?

Further important questions that must be answered include whether the Chinese PSCs will take orders from the government and whether Beijing is going to frame a clear code of conduct and related rules of engagement. Assume, for the sake of argument, that some sort of crisis occurs in a far-off country that involves dozens of Chinese nationals. In this hypothetical case, assume that a local terrorist organization has kidnapped Chinese workers and is threatening to kill them unless Beijing pays a ransom or provides political support for the terrorists’ cause. If a local PSC is operating in the area, is it going to negotiate on behalf of the Chinese government or undertake kinetic action on its own authority? While a debate is open in Beijing there is still a long way to go before the necessary capabilities are developed, including a code of conduct and most importantly the chain of command and responsibilities.

The current use of international and Chinese PSCs along the BRI has several implications for U.S. foreign policy and national interests. Considering the decades of experience that the U.S. Department of Defense and the State Department have developed in the use of security contractors, the U.S. government could promote international standards and clear guidelines that the Chinese PSCs would be required to follow in a way that would align them with the U.S. security private sector. In this respect, other international actors such as the International Code of Conduct Association (ICoCA) and the International Committee of the Red Cross are at the forefront of this cooperation model.

Ignoring the problem could still result in increased professionalism of Chinese PSCs, but not according to standards established by Western companies. Instead, the role model may be established by new actors that are perceiving the BRI market for force as a very lucrative opportunity, namely Russia’s private military security companies.

The author’s opinion does not necessarily reflect the opinion of the SCM Center.