China’s Blackwater-Style Private Armies

The upcoming spread of China’s private armies in territories of Xi Jinping’s expanding Belt and Road Initiative appears about to become as profitable as buying host countries on the cheap through massive loans for infrastructure that tie them to Beijing’s political interests.

According to a recent report by the Berlin-based Mercator Institute for China Studies: “By 2016 a total of 847,000 Chinese nationals worked in more than 16,000 companies worldwide. The BRI, therefore, acts as a catalyst for the further internationalization of Chinese PSCs as the BRI pushes Chinese SOEs and other firms to expand internationally, often into risky environments, Chinese PSCs can fill the security gap by providing global services.”

These private security companies, staffed mostly with People’s Liberation Army veterans, provide security for Chinese construction and other concerns, protecting economic and geopolitical interests where the PLA can’t do it themselves. They directly serve Beijing's interests without being state-owned, a new notch in the BRI without being an acknowledged part.

The PSCs, as they are known, are indirect channels of influence as they operate, for instance, in collaboration with Pakistan’s own private security companies, most of which are run by military veterans. And the Pakistan military is directly involved in managing projects in the US$64 billion China-Pakistan Economic Corridor.

The Chinese PSCs play more or less the same role as the US’s controversial Blackwater Worldwide, founded in 1997 by former Navy SEAL officer Erik Prince, in Iraq and Pakistan and is itching to play in Afghanistan. After running into controversy in Iraq that included allegations of unprovoked murder, Blackwater has been sold to private investors and changed its name to Academi.

A part of Pakistan’s CPEC is to beef up security and surveillance capability. These private armies are training Pakistani soldiers and already have a presence in Pakistan and a number of other countries and there are questions what role they will play. They already have done in various hot spots of conflict as in Sudan in 2012 when they helped the Sundanese rescue personnel in Al-Abbasiya village. Their involvement in such activity renders meaningless the prohibition of carrying weapons.

In 2015 there were as many as 4,000 registered private security companies in China, employing more than 4.3 million security personnel. By 2017, according to the Mercator report, the number had risen to 5,000. Like their Western counterparts, according to the report, “most Chinese PSCs employ former soldiers or former police officers, a fact that blurs the line between China’s security forces and private security providers.”

While the phenomenon of private security companies (PSC) is not something new even in China as they were only legalized in 2009, the business is going international, following in the footsteps of expanding Chinese businesses worldwide. These companies, like Blackwater and its contemporaries, are likely to stay unregulated because they allow the Chinese government to protect its interests without getting directly involved in any of this activity. That is to say, even if even some untoward incident takes place in future in any of the 68 countries, the Chinese government will be free from any blame, much as the US military has escaped blame for depredations by the private armies that contract with it.

As the Mercator report states, “According to Chinese state media, 20 Chinese PSCs had entered the international market by 2016 and had deployed about 3,200 security professionals overseas.” And, it continues, the spread of private armies in BRI countries has Beijing’s blessing, a result of the state-owned companies’ preference for Chinese security personnel which are not only cheaper compared to western security companies but also allow the Chinese government to avoid criticism on any official overseas military deployment by the PLA.

Allowing private armies to spread in the so-called BRI countries fits well with the Chinese Communist Party’s (CCP) policy of keeping the PLA and other paramilitary groups under its exclusive control. Deployment of PLA soldiers in countries to protect Chinese companies, both private and public, would allow these companies to have influence on the PLA, something that the CCP resists fiercely. Hence, its preference for private companies operating to protect Chinese interests overseas.

While Chinese companies are as yet smaller and have operational limitations, it is obvious that given China’s expanding reach the business has huge potential to grow and expand in all aspects. The BRI program aims to connect China with at least 68 countries and 4.8 billion people across Asia, Africa, the Middle East and even Europe. Many companies are thus already planning both territorial and operational expansion and they want security.

“Chinese laws regulating the security sector only cover activities on domestic soil,” Mercator said. “And international law remains vague about PSCs…therefore, constrained only by the laws of the country in which they operate, Chinese PSCs with a global presence find themselves with substantial leeway to operate with little to no legal consequences for them at home.”

With this leeway available to the companies, the Chinese contractors can easily get weapons in countries with lax gun control laws. And, in countries with stricter gun control laws, Chinese companies have been found entering into partnership with local security companies and are operating through and with them, thus potentially retaining their business and presence.

Again, as in the CPEC’s case, Chinese private “companies such as COSG, FSG and HuaXin ZhongAn have evidently found loopholes around this and continue to offer consulting and hands-on security services in Pakistan. In doing so, they have filled the gap created in the market by the departure of Western PSCs in 2012.”

Operating thus through loopholes and with Beijing not regulating these companies’ overseas activity, there is every likelihood of these companies becoming a major source of China’s influence. Even where countries,such as Pakistan, have strict laws, their ability to object and constrain the PSC activities will be limited because of their increasing financial dependence on China.

Thus, swamped by Chinese capital and Chinese ‘private armies,’ the New Silk Roads are going to look more and more like unofficial Chinese territory.