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.
Details of the operation last year, revealed here for the first time, point to the greater role being played by China’s fledgling private security industry. Its growth has echoes of the prominent and often controversial part played by western contractors such as Blackwater, now known as Academi, and DynCorp in Iraq and Afghanistan after the September 11 2001 attacks. The logic is the same: contractors are convenient and deniable. But they and the military are in reality two sides of the same coin. The intermingling between PLA and private security contractors often staffed by “former PLA, is a blurry line,” says Andrew Davenport, chief operating officer of RWR Advisory Group, a risk consultancy. Though private, few doubt the groups are solidly under the control of China’s national security bureaucracy. They represent “a parallel security strategy”, as Mr Davenport puts it. Foreign policy shift China has been reluctant to get involved in politics abroad, part of a decades-old doctrine of “non-interference”. That caution is being tested by its rapid economic growth and the boldness of some state-owned companies, which routinely work in environments that western counterparts avoid. Chinese companies service power stations in Iraq and a telecommunications network in Syria; they mine copper in Afghanistan and pump oil in South Sudan.SIA Energy, a Beijing consultancy, estimates that 7m tonnes a year of oil produced by Chinese state companies are routinely shut in worldwide due to violence in the likes of Iraq and South Sudan. The job of protecting China’s ever-expanding commercial interests and the more than 1m Chinese living abroad has led to shifts in the country’s traditionally cautious foreign policy. Its navy has fended off pirates in the Gulf of Aden since 2012 and rescued civilians trapped in Yemen in 2015. Its combat troops are being deployed under UN peacekeeping mandates in countries where China has investments, such as South Sudan and the Democratic Republic of Congo. And last year Beijing established it’s first foreign military base, in Djibouti.
The growth in the use of Chinese security contractors is part of this trend as Beijing looks for ways to protect its assets abroad without resorting to an imperialistic foreign policy that could play badly, both at home and abroad. “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,” says Yue Gang, a retired PLA officer.
“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.
Preventing “diplomatic incidents”. The lessons of America’s wars over the past 15 years, when more US contractors than uniformed US military personnel have died in Iraq, Afghanistan and Pakistan, may be instructive for Beijing. According to a study by the Watson Institute for International and Public Affairs, 7,071 US contractors have lost their lives in Iraq, Afghanistan and Pakistan since October 2001, slightly more than the 6,860 losses of the US military.
“Private security contractors allow politicians to move some of their military activities off the books in terms of oversight and political responsibility,” says John-Clark Levin, a private maritime security expert based in the US.
Like their western counterparts some Chinese contractors are given jobs that would be politically sensitive if handled by government forces. “One advantage of using private security is that it can protect governments from the risk of diplomatic incidents,” says Ben Stewart, general manager of Maritime Asset Security and Training, a UK company that provides anti-piracy guards for ships. Sea marshals working for Hua Xin Zhong An, a Beijing company, are able to use lethal force as a self-defense measure against pirates, according to their contracts, while their Chinese navy escorts can only fire warning shots unless their warship is under direct attack. On land the Chinese government is even more cautious. Tao Dexi, a contractor with Dingtai Anyuan International Security & Defense, which has operations in Iraq, says none of the staff of the security companies with which he is familiar is allowed to carry a gun.
“Chinese security companies have always carried out security missions via local teams,” he says. “[But] under extreme emergencies, Chinese security staff can borrow guns from the local security staff.” While viewed initially with distrust in some corners of Beijing, the industry has been embraced by the Chinese leadership. Following the violence in South Sudan last summer President Xi Jinping advocated “improved safety risk evaluation, monitoring and pre-warning, and the handling of emergencies” for companies in dangerous territories. He called for measures to support investment in risky countries.
Two months after his comments, the difference between stationing troops and contractors was further blurred after DeWe announced plans to build two “security camps” in South Sudan and the landlocked Central African Republic. These appear to be the first private security facilities of this type to be used by Chinese companies, heralding a more permanent security presence.
Li Xiaopeng, DeWe’s chief executive, told a Beijing forum on overseas security in October that “our next step is to mass-produce [safety camps] in countries with Chinese investments as well as [those] with instability factors”. Government backing Based near Beijing airport, DeWe’s compound has a converted warehouse featuring a mock-up of a Middle East town. The model’s facades are used to practice evasion tactics and hostage rescues. Hao Gang, a former police official who is DeWe’s general manager for Beijing, says the group’s biggest revenue generator is to provide what he calls “integrated solutions” for Chinese companies going abroad, including training, on-site security and risk assessment. 3,200 Chinese employees of private security groups overseas The group was founded in 2011 by a number of former military and police officers who had first worked together during the 2008 Beijing Olympics. Since 2013, 86,000 Chinese civilian employees have been trained, says Mr Hao.
“It depends where they are going. If they are going to Paris, we teach them how not to have their passport stolen. If they are going to Kabul, we teach them how to evade kidnappers,” says Mr Hao.
Private security firms were only made legal in China in 2010, by legislation that allowed companies to provide armed services to domestic businesses like banks and factories. Now, DeWe has 352 Chinese employees based abroad, as well as 3,000 locally hired staff working for companies such as China Road and Bridge Corporation building the Nairobi-Mombasa railway, as well as defending CNPC in Sudan.
Chinese security companies are still finding their feet, says Frauke Renz, a researcher who specializes in the private security industry. “The big international contractors are more experienced in those environments,” she says. “If you take Iraq or Nigeria, for instance, most international companies have been operating in those countries for years”.
Yet many Chinese contractors are benefiting from government pressure to use only domestic security firms. CNPC, for example, used to employ Control Risks, a UK company, to guard fields in Iraq, but in 2010 began to employ Guanan, a Chinese company with close links to ZhenHua Oil, China’s fifth-largest oil company.
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.
HXZA declined to be interviewed. A handful of other companies such as Shandong Huawei, Veterans Security Services and Dingtai Anyuan, have similar profiles and recruit from the same pool of veterans, providing guard services abroad and training state company employees. Aside from the language advantage, they are cheaper than their foreign counterparts” a team of 12 Chinese guards costs about $700-$1,000 a day, the same as one British or US guard, say contractors.
The legal basis for permitting Chinese companies to deploy guards abroad is still vague, admits DeWe’s Mr Hao: “We obey all local laws in the countries in which we work.” The industry is a byproduct of China’s prodigious overseas expansion, which has been taking its companies into ever more dangerous territories, places where ground troops, both foreign and local, are either unwelcome or ineffective. “Private contractors are sometimes the least bad option for security,” says Edward Allen of ViennEast, a risk consultancy and former security analyst in Iraq, “that is the reason they are there.” Additional reporting by Sherry Fei JuStory here.
Overseas security to get upgrade
April 22, 2016
By Zhong Nan
Private firms will boost staff, intelligence and tools to better protect Chinese interests abroad
China will beef up its private security services overseas to protect life and property, with stronger manpower, better equipment and intelligence, and more effective operations, industry analysts and insiders said on Thursday.
The country now has about 3,200 security professionals protecting Chinese companies overseas. That is far fewer than major global security service providers such as US-based Blackwater Worldwide, which has more than 23,500 employees around the world and has trained over 100,000 professionals, data from the China Overseas Security and Defense Research Center in Beijing show.
Large companies, including China Security and Protection Co and JAS Security Group, both based in Beijing, plan to recruit more professionals, as well as to establish an industry union to integrate resources of China’s 20 largest security service companies to gain more contracts.
Tools including multifunctional safety rooms, armored vehicles, anti-bomb walls, police dogs and chemical defense equipment will help them upgrade their ability to protect such clients as China National Petroleum Corp and China Road and Bridge Corp in Africa and Latin America.
Liu Xinping, deputy director of the China Overseas Security and Defense Research Center, said members of the union will share intelligence, maritime-and land-based logistics networks, base facilities and defense equipment.
As many Chinese businesses focus on expanding their global presence, a total of 847,000 Chinese now work in more than 16,000 companies throughout the world, data released by the Center for China and Globalization in Beijing show.
However, many of these companies’ assets and staff, especially in Africa and the Middle East, face threats from terrorism as well as geopolitical and tribal conflicts.
“Because China doesn’t have a strong military presence in foreign countries, and most foreign governments prohibit security service companies from carrying guns, it is crucial for Chinese security companies to build close communication channels with local police stations and army bases, as well as Chinese communities in host countries,” said Li Jiang, head of the overseas department of China Security and Protection.
Yang Qian, deputy secretary-general of the Center for China and Globalization, a Beijing think tank, said “enhanced intelligence coordination is needed for identifying terrorists, their movements and logistics and funding pipelines between and within governments in the region”.
Yang said China should establish a specialized government body to ensure that its companies’ overseas interests can be efficiently protected and to further reduce dependence on Western security service companies.
The China Overseas Security and Defense Research Center estimated that Chinese companies pay more than US$10 billion each year for protection services worldwide. However, it said, Chinese security companies hold less than 10 percent of the industry’s global market share.Story here.