China’s private security companies (PSCs) are poised to play a larger role in securing the country’s expanding global interests, serving as a strategic tool to ensure an armed presence in key areas amid rising tensions with the United States.
In particular, China’s PSCs are expected to play a greater role in protecting the Belt and Road Initiative (BRI) projects following President Xi Jinping’s statement in the recently ended 20.Th Communist Party Congress.
In his remarks, Xi said China would “strengthen our capacity to ensure overseas security and protect the legitimate rights and interests of Chinese citizens and legal entities overseas,” indicating a greater role for China’s PSCs.
Notably, a PSC protects a strategic point such as an embassy, port or military base, while a private military contractor (PMC) is involved in a wide variety of military operations.
In a 2018 report, the Mercator Institute for Chinese Studies (MERICS) noted that 20 of the 5,000 registered Chinese PSCs provide international services, with 3,200 employees operating in countries such as Sudan, Pakistan and Iraq. According to other sources, the actual number is probably much higher.
Nevertheless, China is a small part of the global – and lucrative – PSC industry. According to an October report by the Jamestown Foundation, a US-based think tank, the global PSC industry is worth between US$100-224 billion annually, with the US being the largest consumer of private military and security services.
Of that figure, China’s overseas PSC industry is believed to be worth only $10 billion. But as the United States Institute for Peace (USIP) noted in a 2018 report, this figure could rise dramatically with the growth of BRI projects.
Paul Nantulya, a research associate at the Africa Center for Strategic Studies in Washington, says China’s strategic shift away from Deng Xiaoping’s principles of “wasting time, hiding your strength and never taking the initiative” has fueled the expansion of global leadership. In China’s PSC industry, the South China Morning Post (SCMP) quoted him as saying.
“Security companies run by ex-People’s Liberation Army (PLA) and former Chinese police will be recruited more to provide security to Chinese state-owned enterprises involved in the implementation of the Belt and Road Initiative’s multi-billion-dollar programs,” Nantulya said, according to the SCMP.
Pascal Ebb of the Peace Research Institute in Frankfurt points out that most BRI projects are heavily concentrated in poor, unstable or conflict-ridden environments such as Pakistan, Myanmar, Nigeria and Sri Lanka.
“For example, later  After the coup in Myanmar, protesters in Yangon set fire to Chinese-owned textile factories as punishment for China’s support for the new junta regime, says Abb. He said BRI’s presence in conflict zones and often questionable project terms pose unique risks, opening up the market for China’s PSCs.
Along these lines, Aaron Magunna of the European Foundation, a South Asian studies research analyst, says the BRI created and has sustained overseas demand for China’s PSCs, citing their particularly visible presence in Cambodia.
China’s BRI expansion into high-risk countries in Africa, West Asia, Central Asia and Southeast Asia, often with limited governance, weak institutions and chronic corruption, poses a security dilemma for Beijing, the international body noted in a September 2020 report. Strategic Studies (IISS).
The report noted that China’s autocratic local regimes and its own internal discriminatory behavior towards religious and ethnic minorities, including in Xinjiang, could make BRI projects, assets and personnel targets for disenfranchisement, disaffected terrorists and extremist groups.
China’s specific military and political needs raise unique threats to its PSC.
While deploying the People’s Liberation Army (PLA) to secure China’s BRI projects is the most direct course of action, such a move could fuel perceptions of Chinese militarism, expansionism, and neo-colonialism—practices that President Xi often cites. Portray the US and the West in a negative light in developing countries where China aims to gain a foothold in the BRI.
At the same time, China may still face difficulties in its ability to sustain large-scale military operations far from its borders. In a July article in the South China Morning Post, US Department of Defense (DOD) senior analyst Joshua Arostegui pointed out a surprising lack of PLA logistical support, basing his conclusions on US military analysis that focused on the lack of Chinese state footage. PLA logistics infrastructure from logistics ships to aircraft aprons.
To compensate for these shortcomings, China could use PSCs as a continuous security element in its BRI projects to provide a low-level presence that makes it more feasible to maintain.
At the same time, China’s PSCs may serve a larger geopolitical purpose operating within a legal gray area. A January report by the Center for Strategic and International Studies think tank noted that China maintains strict controls over its security sector, limiting what its PSCs can do at home and abroad.
The report states that Chinese PSCs that operate nominally independently may receive funding or contracts from the Chinese government, be under direct government control, or work for Chinese state-owned enterprises. The report notes a critical difference between China’s PSCs and PMCs, noting that while China expressly prohibits PMCs, it legalized and regulated PSCs in 2009.
That tighter state control may have helped China’s PSCs avoid entanglement in regional conflicts and nefarious violence associated with PMCs like America’s Blackwater and Russia’s Wagner Group, noted Courtney Weinbaum in a March article for RAND.
However, she says the growth of China’s PSCs could lead them to take a more militaristic approach in the future and expose themselves to the pitfalls they are designed and regulated to avoid.
While China has shown strategic restraint in its use of PSCs, Weinbaum notes that if China changes its approach, it has the option to increase employment for a wide range of military operations.
China’s PSCs are therefore quietly becoming an asymmetric means of power projection as Beijing weighs their global reach, plausible deniability, potential strategic impact on BRI host nations, and relatively lower costs than conventional military deployments.