Members of the Ever Victorious Army, a mercenary army in China, during China’s Taiping Revolution. Led by American Frederick Townsend Ward and later Charles Gordon.

Every once in awhile, someone writes a good article on the state of some of these foreign markets that I really don’t have a good grasp of. For example, I do not speak Chinese, I do not work in the PMSC market in China, and I have had no interaction with Chinese contractors here at the blog or on Facebook. That’s not to say that they are not reading the blog or my FB stuff, but still, it is extremely difficult to get a good read on what is going on with that industry.

So I have to depend upon open source stuff that comes out, and try to put the pieces together. I also use my background as an armed security contractor to sift through what is interesting and what is not. With that said, I found these two articles below, to be very interesting.

The first talks about some key incidents that have fueled some movement in the Chinese PMSC market. In South Sudan last summer, there was a typical African ‘wild fire’ that broke out between the warring political factions there, and Chinese companies and their personnel were trapped. A PMSC named DeWe was called upon to rescue these folks, and their operation lasted over 50 hours. Here is a quote.

On the evening of July 8, the streets of the South Sudanese capital of Juba were raked with gunfire as an uneasy truce between warring political factions broke down. Inside the offices of DeWe Security, a Chinese private security firm, phones started ringing. Panicked Chinese oil workers employed by the China National Petroleum Corp, the main client of DeWe (pronounced DeWei) in South Sudan, were calling an emergency number to say they were in harm’s way and awaiting instructions. For Kong Wei, head of DeWe’s Juba office and a veteran of the People’s Liberation Army who retired five years ago, it was the start of a 50 hour-marathon without sleep as he and his colleagues executed an evacuation plan. “Bullets and shells flew over our compound all day and night”, says Mr Kong. The contractors soon realized that their tin-roofed cinder-block building couldn’t stop bullets ” just one of the many lessons they would learn.
In all, 330 Chinese civilians, stranded at 10 locations across the city, were instructed to hunker down until the airport could reopen. Some moved into shrapnel-proof metal containers. It was only on the fourth day of the fighting, once the government had blasted the rebels out of Juba, that the trapped workers were evacuated to Nairobi, the capital of Kenya.

I have no idea how many CNPC personnel were killed or if they all made it out alive, but the point being is that this was a major security nightmare, and it sounds like they were not that prepared for such an event. Chinese companies are not that responsible in that regard, and they are also going about it security in a very naive kind of way. For example, you should not be doing security in places like Iraq without a gun. Nor should you be providing security on boats without weapons. It’s just stupid and I continue to see this learning curve–they fear an liability of arming folks, then a bloody incident occurs where folks are killed and the security failed in protecting everyone, and then you get the backlash from the families of the deceased and from your citizens back home. Then eventually, they come to the logical point of arming their security. Remember, your threats out there could care less about your views on weapons and they will exploit your weaknesses if unarmed.

It kills me when this lesson had to be learned in the beginning stages of the Marsec industry when piracy was peaking, and unarmed guards were actually jumping ship as ‘armed’ pirates had their way with the client and their vessel. Well, the Chinese are learning this as well.

The other thing that needs to be brought up when talking about China, is their economic policy. OBOR or One Belt One Road is a Silk Road 2.0 type economic policy that China is currently trying to implement. It is said to be worth well over a trillion dollars. What is also driving OBOR is China has a manufacturing surplus, and it needs more trading partners and routes bad. Especially when they are now dealing with a Trump administration that has not been that favorable towards China.

As for the PMSC element of OBOR, Erik Prince and FSG just recently announced strategic alignment with OBOR. In one of the press releases, FSG mentioned that they were setting up two FOBs in Yunnan and Xinjiang province. China has some issues in these regions, and they have been clamping down on muslim extremists big time in places like Xinjiang or Yunnan. (on a side note, Xinjiang is Frontier in english…which makes you think that FSG was formed all along to deal with Xinjiang. It explains why they would bring on Prince, who is well known to jihadists)

Another point to bring up with OBOR is that the land component of this strategy has muslim extremists to contend with. TIP is one group of concern, and their members are getting more operational experience in places like Syria. They will be coming home, and that knowledge will be coming with them. Also, as China’s dealings with their muslim populations has been known to be extreme. But because journalists are really not able to cover that very well, I have no idea how bad the relationship really is. My guess is that it is bad, and the fear of a population being sympathetic to extremists is legitimate. So if OBOR is directed at building roads, pipelines and power lines in these areas, they will probably have issues. Here is a quote I found from one article that talked about actual numbers.

For China’s “One Belt, One Road” (OBOR) initiative, Islamic risk is also a prominent political danger. According to the broadest definition, OBOR involves 64 countries, 33 of which are Muslim countries, accounting for more than half the total. Among the remaining 31 non-Muslim countries, 10 countries have obvious existing Muslim unrest and are at risk of terror attacks. In total, 44 countries have Islamic risk, making up 69 percent of the total number of countries along OBOR.For example, Pakistan, China’s iron-core brother, is a country with serious Islamic extremism. From 2012 to 2013, violent terrorist incidents in Pakistan caused 11,590 deaths, which included 6,008 civilians, 1,408 policemen and 4,174 militants.

So there is OBOR and then there is also their expansion in Africa and their dealings in the middle east. I have written about that stuff in the past, and that is not new. But OBOR is something else, as far as scope and cost, and we will see how that works out.
Another deal that was mentioned in the articles below, from an industry news angle, is the growth of Chinese PMSC’s and the fact that they are unionizing. The first quote is about growth and it sounds like DeWe is making it’s moves. Also, it is interesting to know that HXZA has the monopoly on Chinese MarSec.

DeWe’s profile rose dramatically last summer when Chinese Poly-GCL Petroleum Group Holdings hired it to manage security at a $4bn LNG project in Ethiopia” the largest project that the Chinese private security industry has been asked to protect. Some other companies appear to have friends in high places. HXZA, for example, has a near-monopoly on security for Cosco Holding and China Shipping Container Lines, China’s two largest state-owned shipping groups. “They clearly have very solid relations to the state, considering how loyal their customer base is. And they are not that cheap,” says one foreign private contractor.

That LNG project in Ethiopia is huge! Here is a quick snippet of what that involves.

Development of the Hilala and Calub gas fields in southeastern Ethiopia may finally be getting underway, more than 40 years after their discovery.Project developers laid the foundation stone in early March for a $4 billion project to export gas from the fields to China. The project, which is being funded and developed by Chinese joint venture Poly-GCL Petroleum Group Holdings, involves the construction of a 700 km gas pipeline to transport up to 12 billion cubic metres of gas per year from the Ogaden Basin to the port of Damerjog in Djibouti, where the Hong Kong-based independent will build a 3 mtpa LNG export plant. The plan is to eventually expand the plant’s capacity to 10 mtpa.Construction should start in August and is expected to take three years to complete, a PR representative for the Djibouti government told Natural Gas Daily.

The reason why they need robust security for this operation is because of groups like Ogaden National Liberation Front. These folks attacked a Chinese assets in Ethiopia before, and no doubt, they will make things difficult for them again.
The final quote that was interesting as well, was this deal on numbers of PMSC’s and the fact that most are not armed. That is a bad combination, and I they are going to have quite a few incidents in the future if this is the attitude.

“About 3,200 Chinese employees of private security groups were based abroad last year”, says Liu Xinping, deputy director of the China Overseas Security and Defense Research Centre. “That compares with 2,600 Chinese troops deployed under UN mandates” China’s only foreign military deployments in conflict zones. Yet with a few exceptions the security contractors are usually unarmed. DeWe’s Chinese staff did not carry weapons during the fighting in Juba but led teams of armed locals. 7m Tonnes of oil destined for China said to be shut in by violence overseas each year Beijing is extremely cautious about the industry, partly due to the abuses of the type that have periodically plunged US occupations of Afghanistan and Iraq into crisis. In 2010, supervisors at a Chinese-owned coal mine in Zambia fired into a crowd of workers demanding higher pay, injuring 11 and triggering an anti-China backlash.
Two years later, a supervisor was killed at the site during a dispute over wages. One security company manager, who asked to remain anonymous, says all contracts they sign with Chinese state companies prohibit employees from carrying weapons.
“The government doesn’t want Blackwater,” he says.

They may not want the liability attached to arming their PMSC’s, but the threats out there could care less. They are armed, and to think anything other than an armed security professional will be able to stop these folks, is wishful thinking. It also does not match up with reality. China needs to take a hard look at what is happening worldwide, and know that it is a very dangerous world. If they care about their workers and countrymen, they should do the responsible thing and arm their security. Lives depend upon it.

This brings up another interesting point. Western PMSC’s have a distinct advantage when it comes to the armed security contractor game. Firearms are very much a part of the US culture. To not be armed is odd, if performing security functions. Plus, the US has a constitution that protects the rights of gun owners and our freedom of speech. In China, not so much. lol Matter of fact, these so-called Chinese PMSC’s, are really not private per se. They are state sponsored companies, and tightly controlled. They do not want these folks armed, because honestly, China has had a horrible time of uprisings in it’s history. Some of the most bloodiest rebellions and uprisings in the history of mankind, have happened in China. So they are very wary of losing any control or monopoly on the use of force. But their PMSC industry is going forward, and they are getting lethal because that is reality if they want to operate in places like Africa or the Middle East.

The question I always like to ask with this stuff, is where is the industry at, and where is it going in places like China? Hopefully this information helps the readership a little, and I will keep my eye out for any new movement with this stuff. –Matt

Chinese private security goes global

February 26, 2017

By Charles Clover

On the evening of July 8, the streets of the South Sudanese capital of Juba were raked with gunfire as an uneasy truce between warring political factions broke down. Inside the offices of DeWe Security, a Chinese private security firm, phones started ringing. Panicked Chinese oil workers employed by the China National Petroleum Corp, the main client of DeWe (pronounced DeWei) in South Sudan, were calling an emergency number to say they were in harm’s way and awaiting instructions.  For Kong Wei, head of DeWe’s Juba office and a veteran of the People’s Liberation Army who retired five years ago, it was the start of a 50 hour-marathon without sleep as he and his colleagues executed an evacuation plan. “Bullets and shells flew over our compound all day and night”, says Mr Kong. The contractors soon realized that their tin-roofed cinder-block building couldn’t stop bullets ” just one of the many lessons they would learn.
In all, 330 Chinese civilians, stranded at 10 locations across the city, were instructed to hunker down until the airport could reopen. Some moved into shrapnel-proof metal containers. It was only on the fourth day of the fighting, once the government had blasted the rebels out of Juba, that the trapped workers were evacuated to Nairobi, the capital of Kenya.

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