- China's Use of Private Companies and Other Actors to Secure the Belt and Road across South Asia
The Belt and Road Initiative (BRI), comprising the 21st Century Maritime Silk Road and the overland Silk Road Economic Belt, involves 65 countries and approximately $900 billion in planned investments around the world.1 As of 2016, this global umbrella of investment had drawn 847,000 Chinese nationals to work abroad in over 16,000 companies.2 BRI has expanded into countries with new or long-standing security problems, including violent conflict, political instability, and transnational terrorism. The risks associated with working in unstable countries and regions have already resulted in Chinese casualties.3
Not only are Chinese companies and nationals a target for terrorist or separatist-fueled violence, but BRI also has the potential to exacerbate local, regional, or national security issues in the countries through which it passes. Expensive projects can lead to substantial debt in host countries and create opportunities for corruption where transparency is lacking at the national level. Low social and environmental standards can also fuel tensions within local communities, causing anti-Chinese pushback against BRI, as seen in Pakistan, Vietnam, and Sri Lanka.
The case for the Chinese government to secure its companies and citizens working abroad is thus a compelling one from Beijing's perspective. Beijing has had to calculate whether to employ national military resources, the People's Liberation Army (PLA), or other means to do so. Although China has experience in utilizing military and paramilitary forces for national security in its domestic context—against separatist movements [End Page 13] in western China, for example—it has chosen not to use the PLA to secure BRI projects. Doing so would be inconsistent with its long-standing policy of noninterference in other countries' sovereignty, potentially damage diplomatic relations with neighboring countries, test a military that has lacked combat experience since the late 1970s, and require greater investments in military logistics and infrastructure. Instead, Beijing has turned to Chinese private security companies (PSCs).
This essay will first analyze the drivers of Chinese PSCs' work abroad and also examine their legal standing and the weak regulatory oversight within domestic Chinese law and international law. The essay will then look at Chinese PSC activity in Pakistan as a case study of where strong host-country national laws still fail to fully regulate Chinese PSCs. The essay concludes that utilizing Chinese PSCs to secure Chinese projects and citizens working abroad is a tempting option for Beijing, which does not wish to use the PLA out of fear of militarizing BRI. However, to avoid foreign policy disasters through miscalculations or misconduct by Chinese PSCs that increasingly operate in volatile regions, Beijing will need to address regulatory and training challenges in the near future.
Chinese PSCs Are Going Global
Private security companies have operated widely in China since the legalization of the sector in September 2009. While some small PSCs already operated in the country prior to 2009, their activities were limited. The 2009 Regulation on the Administration of Security and Guarding Services legalized PSCs and established a domestic regulatory framework. By 2013, the number of domestic PSCs had increased to 4,000 companies, employing more than 4.3 million security personnel, and in 2017 the number had grown to 5,000.4
As the domestic market became saturated, the international market presented opportunities for growth. In 2010, China's Ministry of Commerce issued rules and regulations for firms operating abroad, creating very strict security requirements for them. Indirectly, this encouraged Chinese PSCs to operate internationally. Under the new policies, Chinese firms must [End Page 14] provide security training to their employees before sending them abroad. Companies that operate in high-risk areas must also set up overseas security management systems and mechanisms for responding to emergencies. By offering such training programs and security management systems to Chinese firms overseas, PSCs could enter into the international private security market.
According to Chinese state media, by 2016, 20 Chinese PSCs had entered the international market, employing 3,200 security personnel overseas.5 This represented only a small fraction of the Chinese PSCs operating domestically and was significantly smaller than...