Chinese Enterprise: Contracting Security Abroad

For many years, China’s national security strategy could be summarized by Deng Xiaoping’s “24-Character Strategy,” which translates to “Observe calmly; secure our position; cope with affairs calmly; hide our capacities and bide our time; be good at maintaining a low profile; and never claim leadership.”  Although certain characteristics of this strategy remain, modern-day China has an overwhelmingly different view of its position in the world.  With interests already spanning the globe, the 2013 announcement by President Xi Jinping for the Belt and Road Initiative (BRI) provides an idea for the scope of China’s desired global economic position.  Projected to involve over $1 trillion USD in more than 60 countries, the People’s Republic of China (PRC) must sort out not only funding and logistics, but also security if it is to reap the benefits of this massive undertaking.

While the maritime trade routes are more easily defensible through military escort and international counter-piracy measures, inland projects present unique problem sets for Chinese enterprise.  Depending on the host nation in question, Beijing may rely on internal security forces to ensure business operations and personnel are protected.  In more precarious regions, however, the PRC is increasingly relying on private security contractors to manage operations.  As a lower visibility option than the People’s Liberation Army (PLA), there are several positive factors in using contractors within the BRI framework.  Beyond the ability to secure business operations, these firms are able to provide training to local personnel and carry out the sale of weapons and equipment, while acting as points of contact for both state and non-state actors on the ground.  Although contractors today play a quantitatively small role within the overall structure of the BRI, it is a growing industry that is quickly revealing itself to be a useful option for Chinese companies operating in dangerous regions around the world.  It will, therefore, likely occupy a more decisive position as operations continue.

Security Abroad

Until recent years, the security of Chinese citizens and assets abroad was of secondary concern for the Chinese Communist Party (CCP).  Although China first announced the “Go Out Policy” in 1999, wherein there was the promotion of foreign investment and business partnerships, activity remained subdued for many years.  In 2012, however, the concept of “protecting nationals abroad” appeared in the CCP’s 18th Party Congress.  The following year, in alignment with Xi’s announcement of the BRI, the PLA followed suit with a white paper involving language around the protection of citizens and interests abroad for the first time in the military’s history.  While these kinds of statements have been made at the policy level but dealing with the issues in practice has proven more difficult for three main reasons: China’s principle of non-interference, complicated operating environments, and limited ability to use official forces.

For over sixty years, China has maintained what are known as its “Five Principles of Peaceful Coexistence,”

For over sixty years, China has maintained what are known as its “Five Principles of Peaceful Coexistence,” through which it claims to promote “mutual respect for sovereignty and territorial integrity, mutual nonaggression, mutual non-interference, equality and mutual benefit, and peaceful coexistence.”  The principle of non-interference, in particular, is frequently referenced by Chinese leadership.  According to President Xi, China “neither interferes in other countries’ internal affairs nor imposes its will on others.”  An additional component to this concept is the practice of only working with official representatives of the host country’s government.  However, both the Chinese government and its businesses operating abroad are increasingly finding the need to not only become involved where it is operating abroad, but also to often work with local non-state actors.  These local groups, whether tribal leaders or militias, are in many cases the key interlocutors with which the Chinese must broker deals to function within the region unencumbered by violence.  In practice, this often involves the Chinese government, or its state-owned enterprises (SOEs), providing financial or material support, as well as mediating between warring parties.  While Beijing attempts to avoid the appearance of choosing sides in a given conflict, this level of involvement is far removed from the traditionally strict approach it used to take to non-interference.  Somewhere in the middle of isolation and intervention, is what Peking University researcher Wang Yizhou has termed “creative involvement.”

The need for this approach has become apparent as China has expanded work abroad.  Given the fragile nature of many states and regions along the BRI, Chinese companies are presented with differing levels of volatility in each area they operate.  While a considerable share of BRI-affiliated projects involves the construction of basic infrastructure, nations requiring assistance in these areas may likely suffer problems of instability in association with inadequacies of governance and rule of law, in addition to political infighting or civil war.  Navigating these environments is a necessity, therefore, if China’s SOEs are to successfully do business.  While potentially high returns on investment are what attracts Chinese enterprise, novel strategies in security and risk management are what allow it to stay.

Concerning this practical application of securing the BRI, China has had to grapple with the type of personnel available for deployment.  Much of the initial thinking regarding these problems has occurred within the PLA.  Yet experts at the Academy of Military Sciences have pointed out an apparent mismatch between the official documents, such as its white papers, calling for the defense of assets abroad, and limitations due to the principle of non-interference.  The overt presence of Chinese military forces in support of conceivably mercantilist goals is in direct contradiction to this philosophy, through which China has ostensibly conducted itself for over half a century.  The PLA understands this issue, as described in an interview with one former Chinese military officer that, “the need for security protection overseas is quite significant and the army is clearly not suitable for this job due to the potential problems it might cause for foreign relations.”

To address this problem, others have highlighted possible solutions to properly safeguard Chinese activity and interests, while abiding by its own constraint of non-interference.  Shanghai University researcher, Su Changhe, has pointed to “participation in multilateral security initiatives led by the UN” in order to achieve this.  The reality, however, is that participation in UN peacekeeping will bring very little value to Chinese enterprise and its security requirements.  To begin with, Chinese businesses seek to operate beyond the bounds of where the UN may choose to deploy peacekeepers, of which only roughly 2,500 are Chinese. Furthermore, the utility of these peacekeepers is fairly low given the often-stringent rules of engagement provided by the UN.

there are still over 30,000 Chinese businesses and roughly one million Chinese citizens currently operating and living abroad.

Issues with official forces notwithstanding, there are still over 30,000 Chinese businesses and roughly one million Chinese citizens currently operating and living abroad.  That is why China’s approach is closer to Thomas Kane’s description where it “relies on a network of host-nation security forces and civilian contractors to protect key assets and citizens abroad.”  This network is often negotiated at the state level, where Beijing tries to secure protection agreements as part of the greater economic benefit promised through the BRI.  In many other cases, however, SOEs are operating more independently and must secure operations without any diplomatic intermediary.

Contracting Security

Quickly becoming a staple resource for SOEs abroad, Chinese private security contractors (PSCs) are fulfilling many of the requirements these companies have to successfully conduct business.  With no official linkages to Beijing, they serve as a layer of deniability in circumventing claims of interference in foreign affairs.  Unlike the PLA, they are also easily deployable to conflict zones where they may work with both state and non-state actors once in the country.

While these characteristics prove PSCs to be a valuable asset for China’s SOEs, there are certain limitations on the industry as a whole.  Although China has thousands of PSCs domestically, offering services such as close protection and facility security, less than 30 are able to operate internationally.  Among the firms deploying approximately 3,000 contractors abroad are Shandong Huawei Security Group and DeWe Security Service Group.  Beyond the size of the industry, though, the greatest restriction is through the “Law of the PRC on Control of Guns,” which stipulates that all Chinese citizens except members of the PLA, the police, and militia, are prohibited from carrying weapons at home or abroad.  Nevertheless, Chinese PSCs are finding a role when local actors are unable, or unwilling, to provide the proper level of protection for Chinese projects.  Among a wide range of services, SOEs are able to bring contractors to collaborate with host nation forces and, if needed, organize, train, and equip personnel.

These contractors – although unarmed – can work independently to keep watch and liaise with local security forces when necessary.  A well-documented example occurred in 2016 when 330 Chinese nationals living in Juba, South Sudan were caught in a firefight between South Sudanese government forces and a rebel militia.  Chinese peacekeepers stationed in Juba as part of the UN mission remained in their bases despite the fact that “protecting oil workers and assets” is included in the peacekeepers’ UN mandate.  DeWe, which was contracted in the state by the Chinese National Petroleum Corporation (CNPC) was left to evacuate the Chinese nationals.  The contractors were able to organize, and direct locals forces to then assist with the rescue operation.

The training capabilities offered by PSCs are an additional way that security is ensured for Chinese projects.  As one of China’s most active firms, DeWe advertises to have delivered over 3,000 in-country trainings.  With many former PLA and PAP (People’s Armed Police) personnel among its ranks, these firms are able to provide specialized unit-level instruction for military operations, static security, and counterterrorism.  A couple of its higher-profile contracts have included stationing personnel for training and overwatch on the $4 USD billion natural gas project in Ethiopia and the $3.8 USD billion Standard Gauge Railway, projected to run from Naivasha, Kenya to Mombasa, Nairobi.

More than anywhere else, DeWe is the main player in Sudan and South Sudan, with a regional office and plans to build a “security camp” in the latter.  This would be “the first overseas private security facility of its kind established by a Chinese company”. Should the PRC reconsider restrictions on firearms abroad, this model may one day evolve into forward deployed locales for armed contractors, somewhat resolving the ongoing issues within the PLA regarding foreign basing.

As has been mentioned, many business operations require more security than unarmed Chinese contractors can provide.  In these situations, PSCs serve to augment local forces through training and management services and, importantly, the sale of weaponry.  Although China has long sold weapons abroad, the profits were largely used to finance its growing defense industry.  Today, the practice is less about financial profit, and more so to ensure its own security in the region, to garner political influence, and to maintain access to resource-rich areas.  Moreover, these sales are geographically aligned to SOE interest and often carried out by these private security firms.

From 2012-2016, China’s exportation of major arms rose by 74 percent, as compared to the 2007-2011 time period, according to a Stockholm International Peace Research Institute (SIPRI) report.  The correlation drawn between arms sales and Chinese economic activity can be most clearly seen on the African continent; a region where over 10,000 Chinese businesses operate, and where weapons exports grew by 122 percent during that same time period.

Assistance goes far beyond the sale of small arms and light weapons, with eleven countries thus far purchasing armed unmanned aerial vehicles (UAVs).  Included among them are Egypt, Uzbekistan, and Pakistan, the latter of which uses them to bolster its protection of the China—Pakistan Economic Corridor (CPEC).  Satellite imagery and other shared intelligence capabilities are additional means exported to partner nations.  As Chinese PSCs increasingly recruit individuals from organizations like the Ministry of State Security, the industry’s ability to deliver these types of services will continue to grow.  The PRC has given this type of assistance to the Nigerian government, for example, in its war against Boko Haram.  This likely bought it the political capital required to ensure the Nigerian government allows, and secures, Chinese business operations into the future.  This can be seen throughout the continent with initiatives such as the China-Africa Cooperation Action Plan (2016-2018), which “called for a deepening of exchanges of intelligence with African militaries and governments and the provision of Chinese training.”  This initiative was renewed more recently through the China-Africa Cooperation Action Plan (2019-2021).

As development along the BRI continues, China is necessarily becoming more overtly involved in international affairs.  Despite this shift toward higher-visibility activity, PSCs may serve to reduce the amount of attention accumulated given the reduced footprint and ability to lead from behind, training and equipping local forces.  As one expert has noted, the utility of Chinese PSCs is the ability to “fill a gap in the provision of high-security services, provide on-demand force that is not already available locally, transfer security technologies and capabilities, [and] add a layer of plausible deniability to the BRI win-win narrative.”  To what extent this industry will develop, however, largely depends on the trajectory of Chinese foreign direct investment, international business operations, and the riskiness of those locations.  To better estimate these trends, a couple of underlying variables provide some insight.  The first is the Chinese view on energy security and the second is the growing influence of SOEs in Beijing’s foreign policy calculus.

Driving Factors of Chinese Activity Abroad

As China’s economy and population grow, and military capabilities develop, greater energy requirements will continue to undergird its strategy.  To ensure those requirements are met, Beijing’s national energy strategy stipulates the need for “strategic reserve accumulation, global access to multiple energy sources, and increased efficiency in distribution and consumption.”  With so many BRI-affiliated projects occurring in the oil and gas sectors, there is a clear linkage to Chinese national security priorities.  For example, since 2015, China has imported over half of its petroleum.  Roughly 85 percent of these shipments pass through the Malacca Straits.  Although dependence on key trade routes will likely continue, Beijing is nonetheless attempting to alleviate this reliance through projects like pipeline construction in Central Asia.

The leading entities charged with ensuring these opportunities are identified, scoped, and completed, are China’s state-owned enterprises.  These partially state-led organizations, while key players in Chinese business, are growing influences in Chinese foreign policy as well.  The Chinese Communist Party has been traditionally risk-averse regarding its involvement abroad and while this hesitancy is slowly fading SOEs may be accelerating the process.  Although the leadership of SOEs is put in place by the Organization Department of the CCP, these enterprises conduct themselves in large part through commercially driven decision-making, rather than purely in line with the political sensibilities characteristic of the PRC.  While there is a large push toward more stringently regulating SOE operations, and ensuring proper precautions are in place prior to mobilizing business and security units, they will nonetheless venture farther than the Chinese government would have likely gone.  This often pulls it into diplomatically uncomfortable situations.

According to the Chinese Academy of Social Sciences, over 80 percent of BRI projects are in medium to high-risk countries.  The majority of which are located in Africa, where SOEs generated $51 billion USD in revenue in 2017 alone.  To ensure those profits continue, large sums of money are set aside for security.  To illustrate this point, China’s “three sisters” (China National Petroleum Corporation, Sinopec Group, and China National Offshore Oil Corporation_ collectively spend around $2 USD billion dollars per year on security.  Other industries such as mining and construction are following suit.  Many of them would initially be under the assumption that the Chinese government would secure protection from the host country, only to realize they must hire contractors to either augment or replace local security personnel.

Domestic political factors are aiding in this shift toward the “corporatization” of PRC affairs as well.  In the last few years, President Xi Jinping has purged several purportedly corrupt PLA officials in order “to detach the PLA from the entrepreneurial side of the Chinese development.”  In terms of SOEs, since 2016 Beijing has been attempting to carry out a restructuring program to better regulate operations and improve government control and oversight.  However, with over 150,000 Chinese SOEs in total, and over 10,000 operating in Africa alone, they will not only prove difficult to fully regulate, but will likely continue along the same trendline.  In turn this pulls the PRC into high-risk areas abroad.

Although Chinese SOEs are apt to break into new markets, preexisting areas of coverage such as the Middle East are becoming more hazardous with the drawdown of U.S. military forces in recent years.  Chinese security firms are capitalizing on this surge in demand, however.  Shandong Huawei Security Group’s website, for example, specifically cites U.S. troops leaving Iraq as a primary reason to enter the market.  Afghanistan presents a similar situation, in which Chinese companies had long been able to conduct business under the incidental protection of the U.S. Army’s 10th Mountain Division, whereas now they are more reliant on their own security measures.

Given the combined effect of these trends, China’s interest, and ability to operate abroad will likely continue to increase.  The Chinese private security industry’s position within these developments remains uncertain for many, however.  Some researchers have claimed that because Chinese PSCs often lack local language expertise, and other functional specialties, that they will “remain a passive spectator in the overall BRI global development.”  They might, therefore, be stuck working behind the walls of gated compounds and will depend “on external armed protection from local militia or international contractors.”  This is certainly true in many instances, but as the Chinese private security industry develops, this will become less common.  The ban on Chinese citizens having firearms abroad will likely stay in place for the foreseeable future.  However, the effect that China’s PSCs will have, for better or worse, as conduits for training, arms sales, intelligence gathering, and risk management writ large will become commensurate with the amount of money SOEs are spending on security.  Furthermore, the dependence on local actors is a benefit for the industry, considering the Chinese wish to keep as low of a profile as possible wherever they conduct business.

Additionally, many Chinese SOEs prefer to exclusively work with Chinese PSCs.  In part this is because of the shared language, but also because of certain secretive aspects of their operations that they would not feel comfortable with foreign, particularly Western contractors, becoming privy to.  As one DeWe official explained, “For Chinese firms, especially with security work, they…want to speak with another Chinese person.  We can also one hundred percent reflect their thinking when we work.”  As is the case throughout Africa, there are also suspicions that local contractors that are often underpaid and poorly equipped will only compound the preexisting security concerns given potentially subpar performance, or entanglements within the ongoing tribal or regional disputes of the country in question.  For these reasons, SOEs often see the need to bring Chinese firms to properly train, equip, and organize local forces.

While still in its nascent stage, the Chinese private security industry is undeniably gaining traction, both domestically and internationally.  Although the sector is still more domestically focused, as these companies develop the requisite capabilities, they are beginning to turn outward in greater number for the service of Chinese SOEs and private Chinese companies.  Anytime they are able to use Chinese firms they likely will, as they “provide the advantage of a low political profile, generally lower cost, the ability to carry out work deemed too sensitive for PLA forces, and some assurance of political reliability.”

In 2017, a managing director for the Chinese Overseas Security Group stated that, “In eight years’ time, we want to run a business that can cover 50-60 countries, which fits with the One Belt One Road coverage.”  While the statement applies to one company, in particular, all the data available thus far points to an industry-wide trajectory conducive to this estimation.

Risk Environment

To further explore risk management for Chinese PSCs and the SOEs that employ them, Africa and Central Asia provide examples of threats both inherent to the operating environment, as well as those contrived, or exacerbated, by China’s presence in the region.

Africa

Discussions regarding the BRI often overlook the extent to which the continent of Africa is involved.  Beyond some high-profile oil pipeline or port infrastructure projects, over 40 of 55 African countries have signed BRI-affiliated agreements.  While many of these countries are not yet deeply involved, as China develops the BRI it will increasingly widen the scope of its work on the continent.  To date, more than 200,000 Chinese workers, and over 10,000 Chinese companies are active in Africa.  In terms of the security threat this presents, more than sixty percent of all attacks on Chinese nationals abroad occur there.

More than most other states on the continent, Sudan and South Sudan provide for a detailed experience regarding Chinese business operations.  Involvement in the region goes back to the 1990s, during the Second Sudanese Civil War but prior to South Sudan’s independence.  Over the years, China has garnered control of over 75 percent of the Sudanese oil industry – intertwining the region so heavily with the PRC that the Sudanese government has even announced that it “aims to turn Port Sudan into a free trade zone to support BRI. ” Today, China is the largest trading partner for both Sudan and South Sudan.  During the initial decades of involvement in the region, government forces were largely capable of ensuring protection for Chinese business.  Over the years, however, the situation has worsened and, so too, have the threats to Chinese personnel.  This reality came to the forefront in 2008, when nine China National Petroleum Corporation employees were kidnapped, four of whom were killed.  Since this incident, China has proven more capable over time to ensure the security of its citizenry in the region.  The efficacy of private security contractors, in particular, was made apparent in South Sudan through their juxtaposition with the PLA peacekeepers remaining in garrison during the fighting throughout Juba in 2016.

All through somewhat unofficial means, Chinese PSCs provide a litany of security options throughout the continent.  In low-risk zones, they are able to independently post security when unarmed guards are sufficient.  While in higher-risk environments they can train and equip local forces, as well as easily work with whatever interlocutors are required, be it state- or non-state actors.

Central Asia

While Africa is in many respects the most dangerous region within which Chinese SOEs operate, Central Asia is quickly becoming a case study in security threats that have arisen exactly because of operations in the region.  Although positioned as a way to alleviate Central Asia of its landlocked condition, opening it up as a “trans-Eurasian corridor,” the enormous scope of the BRI is instead seen by many as intrusive and, in some cases, a threat to their political agency.  In addition, China is experiencing instances of terrorism in the region in response to its treatment of the Uyghurs in Xinjiang.  For example, Syria-based Uyghurs were connected to the 2016 suicide bombing attack on China’s embassy in Bishkek, Kyrgyzstan.  Although the stabilization of the Xinjiang region is an underlying objective of the BRI, domestic activity there may prove counterproductive through the difficulties it raises abroad.

While most of the focus is around high-profile infrastructure development and energy projects, China has also been exporting products to the region which are more affordable than Western, Russian, Turkish, or Iranian suppliers.  This influx of cheap products, however, has also been cited as a source of antagonism given negative popular opinion and instances of media manipulation framing these products as very low in quality.  Narratives are now forming that the end result of the BRI will simply be a more suitable environment for the exportation of Chinese products, rather than any discernably positive changes in the region.  In addition, many worry that the Chinese will replace many basic sectors involved in food production and construction, furthering Central Asian dependency on the Chinese economy.  The situation is further complicated with the Chinese practice of “whole chain industry export,” wherein all facets of the operation are completed by Chinese workers, denying the local populace of potential wages. Statistical data show similar sentiments.  Large portions of respondents believe that “[Chinese] migration will have a direct or indirect negative impact on the domestic labor market.”

Likely in an effort to combat this negative sentiment, in recent years it has begun to change the characteristics of its business deals within the region.  There is an overarching change from mostly infrastructure projects to manufacturing.  China is largely doing this as a response to host nations demanding projects that provide labor for the local population.  This is an indication that the Chinese government and its state-owned enterprises are still beholden to the realities on the ground in each country that it operates.  From an economic perspective as well, SOEs may be diversifying to hedge against financial fallout in a narrow set of industries.

Any reconfigurations regarding Chinese FDI notwithstanding, risk management in the region will remain critical for the PRC as the overall optics of the situation involve a threatening encroachment from the east.  The armed assault on the Chinese consulate in Karachi, Pakistan displays the violent result of this view.  The attackers left a note that claimed it was in protest against the “rise of Chinese imperialism.”  While unconfirmed, responsibility for the attack was claimed by the Baloch Liberation Army (BLA), an Afghanistan-based terrorist organization.  In the past, there have been unsubstantiated claims from Pakistan that the BLA is secretly funded by India.  As one example of many, despite China’s insistence on its “win-win” narrative, attacks of this sort will continue in many areas along the BRI.  Managing these threats will involve an admixture of those aforementioned protective measures, such as security overwatch, weapons sales, and training.  Chinese PSCs can additionally network with Central Asian government forces to provide surveillance and counterterrorism operations.  For more tightly guarded projects, SOEs may even turn to Russian-speaking contractors, which are familiar with not only the terrain, language, and culture of the region, but will also be useful in areas that may become particularly unwelcoming to an ethnic Chinese presence.

Cost-Benefit Analysis

With these risks taken into consideration, China and its SOEs continue to move forward at a rapid pace.  Although there is a heightened awareness regarding the need for proper risk management and security practices, in many ways these threats are self-fulfilling prophecies.  Although many of these areas have preexisting security concerns, the often-accompanying debt burden, opportunities for corruption, and perceived loss of work when projects are completed with mostly Chinese labor can all exacerbate the situation.

Politicians in these host countries have also entangled the Chinese presence through their activities.  In countries such as Kenya, Zambia, and South Sudan, China is often used as a scapegoat to explain, or detract from, the graft and abuse of power that is occurring.  For example, in both Africa and Central Asia, there have been numerous accusations from governments and NGOs that the Chinese are “offloading excess population” to these areas by “actively supporting emigration by request.”  In many instances, the specifics included workers entering the countries with “fake qualifications in order to obtain work visas and take jobs.”  True or not, these ideas within the popular discourse will only heighten tensions.  Increasingly viewed as a “neocolonial” power making profits at the expense of the host country, China’s ability to maintain a low profile through its non-interference policy is waning.

In terms of arms sales, China has largely been able to fly under the radar.  In recent years, though, the practice is becoming more recognized.  These types of deals threaten to dispel any notion that China is an objective mediator within regions undergoing political turmoil and armed conflict.  They additionally run the risk of creating targets out of Chinese citizens working in the region.  For example, after Norinco, a Chinese state-owned enterprise, sold Sudan weapons, there were attacks on Chinese nationals.

While threats pervade, China’s continued ambition displays the overwhelming beneficial nature of the BRI.  In relation to the immense economic and political dividends which the framework will garner for Beijing, the risks it runs are minor in comparison.  In addition, there are several potential benefits derived more specifically through the SOE- and PSC-led operations abroad.  One subsequent advantage for the Chinese military could be increased access for the People’s Liberation Army Navy (PLAN).  Should an SOE be allowed control over a country’s port, there could be “follow-on requests for port calls by PLAN ships.”  Similarly, the inability to secure operations by host-nation forces could also lead to requests for PLA troop access to certain areas of a country.  Fledgling support for such a notion can be seen in certain Central Asian countries’ involvement in Chinese counterterrorism operations, as well as those proximate to China preferring the PLA’s coverage of the border as Central Asia customs officers are often heavily involved in bribes, smuggling, or other drug-related activity.

An additional benefit to China’s growing involvement in Central Asia will be its enhanced positioning vis-à-vis Afghanistan.  With the PRC’s reclassification of Tajikistan as a “zone of special interest,” there has been an uptick of not only economic and political dealings between Beijing and Dushanbe, but also the construction of nearby airbases and other military installations near the China-Tajikistan border, close to Afghanistan.

The possibility of increased Chinese involvement in Afghanistan has become more concrete with the recent announcement by U.S. President Joe Biden to withdraw troops and the subsequent evacuation from Kabul.  Before the Taliban regained control of the country, one Chinese security analyst, Sun Qi, offered that the PRC “may deploy peacekeeping forces to prevent security threats in Afghanistan from spilling over into its western Xinjiang province.”  Although these cross-border concerns are legitimate, the added benefit of peacekeepers within the state would be the coverage provided to Chinese SOEs currently operating there.

Conclusion

While the United States employs between 400,000 and 500,000 contractors every year, and the Russian government deploys roughly 100,000 to 150,000 of its own contractors annually, the Chinese government’s use of PSCs remains modest in comparison.  As time goes on, however, these numbers may increase as BRI projects are formalized and domestic training and recruitment improves.  In addition, with security now a “standard line item in the SOE budgeting process,” PSCs are an intrinsic element of BRI operations.  Contractors not only “close the gap between the PLA’s limited expeditionary capacity and the country’s need for security abroad,” they do so in a cost-effective and plausibly unofficial manner.

The Belt and Road Initiative provides a useful framework for Chinese activity abroad, but it by no means represents the extent of Beijing’s international footprint.  As case studies in Africa and Central Asia increasingly show, where Chinese business goes, private security contractors follow.  Currently an underdeveloped industry, the Chinese private security market shows no signs of slowing down.  The ability to deploy personnel, that maintain a relatively subdued presence, that ensure security on their own, or through the training and equipment of locally available forces, enables Chinese business to operate far beyond what would be possible under government protection.  As nations around the world continue to fail, civil wars ensue, and political strife persists, Chinese enterprise will continue to expand. And therefore, so too will contractors, and their ability to navigate this murky terrain.