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CPEC creates opportunities for Chinese security firms

2016-12-30

Source: Global Times    Published: 2016-12-29


The multi-billion-dollar China-Pakistan Economic Corridor (CPEC) offers a genuine business opportunity for Chinese security companies to expand overseas, but only for a small circle of elite operators, said an executive at a leading Chinese security firm.


There has been a clamor among Chinese scholars for an increased involvement of Chinese security firms in overseas projects by the Chinese companies.


A leading Chinese think tank on December 20 urged in a report that Chinese companies working on projects in Pakistan should take the initiative and solve security issues on their own.


The report was jointly released by the Chongyang Institute of Renmin University of China and Caijing Magazine.


The corridor, which links Northwest China`s Xinjiang Uyghur Autonomous Region with Gwadar Port in southwestern Pakistan, involves investment of up to $46 billion, mostly from China, media reports said.


The CPEC is seen as the flagship project of the "One Belt, One Road" initiative proposed by Chinese President Xi Jinping.


While the CPEC has boosted the security situation in Pakistan, attacks still occurred that killed dozens of people in 2016. And at least two attacks were directed against Chinese workers and the CPEC.


Ahsan Iqbal, Pakistan`s Federal Minister for Planning, Development & Reform, told the Global Times on Tuesday that his country is committed to providing full security to Chinese personnel working on CPEC projects.


In addition to the protection from the Pakistani military and federal government, Pakistan has established a 15,000-strong security force to guard CPEC projects.


"Isolated incidents are sponsored from outside Pakistan to break the momentum of the CPEC. By and large, Pakistan is very peaceful and Chinese companies are happy with the security arrangements," Iqbal said.


However, the minister noted it is not advisable that Chinese security firms enter Pakistan, because their appearance may become controversial in the event of any unpleasant incidents they are involved in.


"There can be tension between Chinese security companies and the local population. It is preferable that Pakistani security personnel and agencies deal with local security problems, as it will not create conflicts between China and the local population," he added.


Zhe Meijie, founder of VSS Security Group, one of China`s leading private security companies (PSCs), said that "the market [for security services involving CPEC] exists, but it is smaller than most people think, and more importantly, not as easy as people think."


Zhe said there is media hype over overseas security services, and it is misleading in a way.


"There has been a barrage of words, but you cannot come up with a percentage figure [for a security budget] and multiply it against the total price of each project and say this is how big the security market for the corridor is," Zhe told the Global Times Thursday.


"The market of Chinese security firms conducting overseas business is at an early, exploratory stage and imagination sometimes overshadows reality," Zhe said, noting that less-specialized companies, those previously purely focused on domestic services and new entrants, are swarming in, on the news of the promising market and motivated by the example of US-based PSCs contractor Academi (formerly Blackwater USA).


Zhe said developing overseas business costs a lot more, and he has seen many of the newcomers end up with a loss.


"There is an oversimplification of what is a complicated matter. Doing this business in Pakistan, you have to consider a range of factors, including ethnic, religious, sectarian, political, military, tribal, legal and administrative ones," Zhe noted.


Having been in Pakistan for years, VSS Security Group offers its clients an all-in-one package solution that encompasses security consultations, training and on-site security services, according to Zhe. The clients are mostly in the energy, construction, telecommunications and finance sectors, as well as international organizations.


Zhou Rong, an expert from the Chongyang Institute, noted that the suggestions in the report are being raised for discussion.


"The security situation (in Pakistan) is not very serious. If it was, the Chinese government would consider suspending or terminating some of these projects," Zhou said, noting that Pakistani efforts are sincere.


"But that is not to say there is no room for improvement, as the CPEC projects are numerous and not all things are perfect," Zhou said.


Zhe said one misunderstanding is that the demand in Pakistan would still be for labor-intensive security services like in China.


"This is wrong. Pakistani law forbids it, common sense does not allow it, and economic interests will not tolerate it," Zhe said.


"The business that has room to grow is expertise-intensive, with management-level services being provided by Chinese security officers, consultants and instructors," Zhe said, noting that such high-end service also costs more.


There is no denying that against a background of a surge in Chinese investment and personnel abroad, China`s security industry is expanding, Zhou said.


"Going out is easy, staying there requires fortitude," Zhe said.


Zhou Rong is a senior fellow of Chingyang Institute for Financial Studies, Renmin Unversity of China.

Key Words: CPEC   China   Belt and Road  

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