This article is part of the World Economic Forum's Geostrategy platform

A military base in Djibouti, an expanding Shanghai Cooperation Organization under Beijing’s leadership, and rapidly growing arms exports to countries around the world: China has left no doubt that it plans to become a global security actor.

The rapid expansion of China’s commercial and political activities around the globe is exposing Chinese citizens and assets to the threats of transnational terrorism, civil unrest, and anti-Chinese sentiment.

And domestic expectations that Beijing will protect these interests, together with the Chinese government’s ambitions to shape global norms, are pushing China to embrace force projection abroad.

For the time being, Beijing is neither willing nor able to deploy the People’s Liberation Army (PLA) overseas to protect Chinese companies and citizens. As a result, Chinese private security companies (PSCs) are stepping in to fill this security vacuum.

Out of the 5,000 registered Chinese private security companies, 20 provide international services, employing 3,200 security personnel in countries like Iraq, Sudan and Pakistan.

The globalization of China’s security policy presents challenges for countries around the world, but Beijing’s use of private actors to defend its international interests carries with it its own unique set of issues.

The presence of private security actors abroad – regardless of their country of origin – is a complicated issue for host governments, due to the impact that these companies can have on the interests and stability of the host country, as well as the difficulty in controlling their activities.

In the Chinese case, however, this issue is even more pronounced due to the blurry line between public and private entities. Despite their nominally private status, Chinese private security companies tend to operate with the tacit support and encouragement of the Chinese government and are often staffed by former PLA officers with close, if indirect, ties to the Chinese authorities.

This makes them complex, quasi-governmental international actors whose behaviour is unregulated, since existing legal frameworks – both at the domestic and international level – do not clearly specify who is responsible for policing their operations.

The potentially negative consequences of this are clear.

For Beijing, there is the risk of these unregulated, relatively inexperienced private security companies making mistakes in the international arena that could have political consequences.

If such mistakes accumulate, this could erode China’s international reputation, which is of utmost concern now that party and state leader Xi Jinping has committed to turning China into a global power by 2049.

And from the perspective of European countries, Chinese PSCs’ international expansion can have an impact on their interests in regions around the world, by potentially causing tension and instability in host countries and by helping Beijing increase its influence in some of those countries.

If current trends continue, Chinese private security actors will continue to expand their activities in strategically important areas along the Belt and Road Initiative, coming ever closer to the wider European neighborhood.

It is, therefore, important to pay close attention to this issue and to encourage the regulation of Chinese PSCs’ behaviour and operations overseas.

A better understanding of the current state of the Chinese private security sector, its overseas activities and the legal conditions is essential as it enables European governments to assess and deal with the impact that Chinese PSCs’ activities may have on their interests and priorities

The report's main findings and conclusions:

  • Chinese private security companies (PSCs) are going global, encouraged by the saturation of the domestic market, the Belt and Road Initiative (BRI) and Beijing’s preference for using homegrown companies to protect its interests abroad.
  • Projects related to the BRI have become a prime market for Chinese private security companies, as Chinese investment expands into countries that are either experiencing or emerging from conflict.
  • Chinese private security companies operate overseas in a legal grey zone: Chinese domestic law does not apply to their international activities, and international law lacks regulation, so they only have to abide by local host country laws, where those exist.
  • The behaviour and operations of Chinese PSCs abroad vary widely from country to country, depending on their contracts and local legislation, or lack thereof.
  • Beijing’s use of private security companies to protect its overseas interests is risky. Due to their relative inexperience, there is high potential for mistakes that could create political backlash for Beijing.
  • European Union member states’ interests will be affected by Chinese PSCs’ international expansion. The companies might contribute to an increase of instability in regions that are strategically important for Europe. At the same time, they could help Beijing increase its influence over host country governments.
  • More thorough regulation of Chinese private security companies’ international activities is urgently needed. Through their own national experience in regulating PSCs, European policymakers are in a unique position to help and encourage Beijing to pass relevant laws and at the same time assist host countries of Chinese PSC activity to strengthen their national legislation regulating foreign private security company activities.

Guardians of the Belt and Road, Meia Nouwens and Helen Legrada, part of the China Security Project, a cooperation between MERICS and IISS.