Chinese Private Security Firms Go Overseas: “Crossing the River by Feeling the Stones”

Africa Monitor

Karthie Lee | September 8, 2014

Chinese Private Security Firms Go Overseas: “Crossing the River by Feeling the Stones”

Against the backdrop of heightened risks from kidnapping, piracy, insurgent attacks, banditry, and other threats, the security business in Africa is booming. Predominantly ex-servicemen of U.S., European, and Israeli descent lead more than 80% of these security firms. As the market opens up, and more and more Chinese SOEs see the need for protection, it seems Chinese contractors are also increasingly aiming to expand overseas.

Chinese privately-owned security companies, both at home and abroad, were only made legal under Chinese law in 2010. Security firms founded by retired PLA veterans that have some success inside China have also sought to capitalize on overseas demand. A dozen of them are now testing the water in Africa and the Middle East. Dewei Security Group Ltd, a newcomer in the African security industry, advises Chinese Road and Bridge Corporation, one of the largest road builders in Kenya. The latter will soon begin its railway project that links Nairobi to Mombasa, a coastal city infiltrated by al-Shabaab and violent political separatists.China Kingdom International protected a Chinese state construction firm in Libya in 2011 and 2013, and sent 19 of its bodyguards to Libya last November to help secure a construction site and ensure the safety of staff. They all safely returned in June 2014. Genghis Security Advisory told Xinhua News it would send 400 trained security personnel to guard Chinese companies overseas, including some in Algeria. Shandong Huawei Security Groupsays it has hired about 100 guards for overseas jobs, working mainly in Iraq. Special Fighters Security Service Group established an office in Afghanistan, and is looking to penetrate South Africa, where there have been multiple incidents of armed robbery against Chinese. These emerging Chinese security firms are now offering to provide personal bodyguards, guard oil and construction facilities, manage locally hired security staff, and protect ships from pirates in the Gulf of Aden.

It is not easy to penetrate the increasingly competitive security market. In Kenya, for example, between 2,000 and 4,000 private security firms employ more than 300,000 security guards. So why might a Chinese company consider hiring a newcomer rather than another established security provider?

Distrust towards local guards gives Chinese security firms a market niche. One Chinese engineer at a Chinese SOE operating in East Africa complained that local guards often cooperate with gangs from outside to steal from the Chinese construction site. “Sometimes the poorly equipped security guards even fail to protect themselves,” the engineer said, “one of my guards was killed in early August, possibly due to political rivalry”. The increasing incidents of kidnapping have further proven local security forces to be inefficient.  “Local forces can often be unreliable and may be influenced by complicated local and tribal politics. A mandarin-speaking security team with similar culture might be more trustworthy and easier for communication, especially in case of emergency,” he said.

But the true Chinese selling point is pricing. Chinese sources say the cost per man for a private security guard from China could be as low as between 3,000-6,000 RMB per month ($489 to $975). Thus, a 12-man Chinese security detachment costs around 3500 RMB ($570) per day. This is similar to the price of local guards, but significantly less than the rates of Western providers that charge up to $4000 per day for a 4-man armed escort. A blog post on the state-owned outlet GlobalTimes also acknowledges this and encourages Chinese security firms to “bring into play the low-cost advantage, equipping overseas Chinese enterprises with low-cost but high-quality homemade security installations.”

The challenges

They might be low cost, but they are not yet highly experienced. The bosses of many of these firms have bluntly admitted the Chinese security industry is relatively undeveloped and inexperienced. Although most of the security firms draw personnel from former police and special military units like the Snow Leopard Commando Unit, few veterans have real combat experience and overseas exposure, due to China’s long honored policy of non-interference. The last war China fought was the Sino-Vietnamese War in the 1970s. Another often cited major shortcoming is the lack of training opportunities in use of firearms in China where, unlike the United States, gun laws are very restrictive.

To add to companies’ problems, the legal environment in which they operate is complicated and murky, often subject to overlapping jurisdictions. The Montreux Document, of which China is a signatory, could provide a voluntary code of conduct for private contractors. But self-regulation might not be sufficient to ensure these private contractors are qualified and accountable.

To get around this, some security firms like Genghis Security Advisory have left Chinese soil and conducted gunfire training in the Philippines, as shown in company’s official microblog.

Chinese private security personnel carry out non-combatant roles, and the vast majority are unarmed. In the open seas, where the law regulating the use of force is less restrictive, a number of security firms like Huaxin China Security are already providing armed Chinese guards to escort cargo ships sailing to the Horn of Africa. Some analysts suggest that armed Chinese security contractors could offer a less diplomatically risky alternative than deploying uniformed troops. But because many Chinese security firms are run by active duty MPS personnel, armed Chinese PSCs could work against China’s policy of non-interference. This risk could become more significant if low-cost but inexperienced private Chinese security forces ended up aggravating, rather than resolving, a situation they were confronted with.

There are diverging opinions in China as to whether Chinese private security companies should be the source of protection for Chinese companies operating abroad. Deputy Director of the Foreign Affairs Committee of the CPPCC Han Fangming, urged “Chinese security firms to expand their presence outside China and encouraged them to learn from their international counterparts”. The Chinese Ministry of Foreign Affairs has, though, reportedly criticized his views on this subject before. So in addition to capacity, market forces, and regulations, the evolution of how Beijing’s approach to protecting its people and investment overseas will influence the path that Chinese security companies take as they feel their way across this particular river.

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