November 26, 2013 7:23 am

China’s public sector looks to private security for help

The walls of Huawei International Security Management’s Beijing office are lined with photos taken in some of the most unstable regions of the world.

The company’s “wall of fame” tells a modern tale of geopolitics and security: powerful Chinese companies venturing into some of the most hostile parts of the globe are trying to mitigate the risks they face after becoming victims themselves of high-profile kidnappings and attacks everywhere from Libya to Ghana.

From meetings with local strongmen in Basra, Iraq, to smiling photos of its burly security personnel socialising with Nigerian and Cambodian security forces, much of Huawei International Security Management’s expansion has been in lockstep with the “going global” policy encouraged by Beijing, says Qi Luyan, its founder and chief executive.

Sitting in his office brimming with military regalia in downtown Beijing, the lantern-jawed Mr Qi, a former People’s Liberation Army operative, paints a picture of the grave security risks faced by China’s corporate giants as they take on energy and infrastructure projects in Africa and the Middle East.

“China’s security industry will definitely grow like China’s other industries, because Chinese citizens and assets overseas are frequently threatened,” says Mr Qi.

Mr Qi’s bullish views may reflect a growing concern for Chinese companies and employees working in unstable regions. In early 2012, 25 Chinese workers were kidnapped in Egypt, while a few months later 29 workers in Sudan were abducted by armed men. All the kidnapped Chinese workers were later released.

In the wake of such high-profile incidents, security analysts point to a change in Beijing’s attitudes towards the risks faced by Chinese nationals, and add that many companies who in the past may have been less squeamish of sending workers into dangerous regions have now become more risk-aware.

“We are now seeing where the employees of these companies and also the Chinese public are becoming quite concerned. Particularly with more highly professional people, such as engineers working in oil and gas, they are coming to a point where they’re saying: ‘look, we’re not going unless you offer us proper protection, because we know how dangerous it is’,” says Alex Storrie, a political risk analyst with AKE Group, a UK-based risk analysis company.

Mr Qi founded Huawei International Security Management in 2009 in Macau and initially focused solely on providing personal protection services to China’s growing number of security-conscious wealthy individuals. But as more Chinese companies undertook projects in unstable regions, his company started providing security to one of China’s oil majors’ overseas projects.

“There are more and more SOEs [state-owned enterprises] going overseas, which means their security needs will grow,” says Chen Yongqing, the chief executive of Genghis Security Services.

Chinese companies are often forced to rely on private contractors because of Beijing’s reluctance to dispatch troops overseas, say analysts.

Raffaello Pantucci, a senior research fellow at Royal United Services Institute, a defence and security think-tank, says: “The [Chinese] government does not want to get stuck in awkward situations thanks to companies, so getting the companies to find ways of making themselves safer is doubtless one aspect of this development.”

Mr Chen’s company, based in a sprawling compound on the outskirts of Beijing, provides counter-piracy measures to Chinese ships sailing around the Horn of Africa and has protected large construction projects in Algeria.

But as Chinese private security companies put more boots on the ground, some observers believe there is a growing need to regulate the industry through legislation by the Chinese government and raise the standard of professionalism.

Peter Evans, an armed forces delegate for the International Committee of the Red Cross in Beijing, believes the Chinese government should provide a “legal framework for Chinese companies operating and providing security services overseas”.

At the moment Chinese security companies are answerable to the laws of the countries they operate in and also to international law, say observers.

Mathieu Duchâtel of the Stockholm International Peace Research Institute says many of China’s private security companies are operating in a “grey area”, with many being run by active members of the Chinese Ministry of Public Security, the country’s main law-enforcement ministry.

“It is a major problem if companies that are in the ‘grey zone’, between being public and private start operating abroad,” he says.

But as the next group of young recruits aspiring to join the ranks of Genghis Security Services line up to be trained by a former French Foreign Legion instructor, Mr Chen says the prospects for the industry remain positive: “China doesn’t have a tradition of sending troops overseas, and so it means they will rely on our security services.”

Additional reporting by Gu Yu

This article has been amended to change the name of Mr Qi’s company from Shandong Huawei Security Group to Huawei International Security Management, which is the name of his overseas operating company.

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