Andrew S. Erickson

New trouble spots

While China’s footprint in Africa has been covered extensively in the international media, not much public attention has been paid to the country’s growing economic and human presence in Iraq and Afghanistan. These two countries have high potential to become trouble spots for Chinese workers as Chinese investment increases, the U.S. military reduces its presence, and Chinese companies and workers increasingly have to provide for their own security.

In Iraq, China’s largest oil and gas producer CNPC is helping to develop oilfields with reserves estimated to exceed 20 billion barrels and likely has at least 1,200 workers in the country. Given that CNPC’s oil operations in Iraq are likely to eclipse its Sudanese projects in terms of both physical scale and oil output — and that Chinese firms are also likely to seek opportunities in helping to repair and expand Iraq’s oil and civil infrastructure — it is not unreasonable to expect the eventual total Chinese presence in Iraq to exceed 20,000 workers. Depending on the opportunities available for small businessmen from China, this number could rise even further.

In Afghanistan, Chinese investment projects include the huge Aynak copper mine and a series of oilfield developments by CNPC that this year are slated to bring Afghanistan its first ever domestic oil production. Afghanistan’s mineral sector has significant potential, with U.S. government officials estimating that the country may hold as much as $1 trillionin lithium, copper, cobalt, iron, gold and other minerals. As such, we anticipate that Chinese investors will increasingly seek to develop mines and supporting infrastructure, and that the total number of Chinese workers and businessmen in the country could eventually rise to at least several thousand.

As China’s profile rises relative to that of the U.S. in Iraq and Afghanistan, it is likely to become a lightning rod that attracts attention and forces Beijing to take a more hands-on approach to protecting citizens overseas. We do not expect in the next few years to see special forces operations like the recent U.S. Navy SEAL raid to rescue hostages in Somalia, but Beijing is likely to take a more muscular approach to protecting Chinese citizens working overseas as its military power projection ability grows and nationalistic pressure rises at home.

Increasing Capabilities… and Expectations

China’s power projection capabilities and Indian Ocean presence are growing gradually but substantially. This has important implications for the security of Chinese worker groups and economic assets in Iraq and Afghanistan as the U.S. draws down and removes its forces.

From a very low baseline, China has been launching unprecedented responses to incidents threatening citizens overseas with increasing frequency and muscularity. In response to the pirating of Chinese-flagged vessels in the Gulf of Aden, China has since December of 2008 dispatched 10 naval task forces to the region. In a textbook example of logistical coordination, amid the overthrow of the Gaddafi regime by rebels, China dispatched the guided missile frigate Xuzhou to symbolically oversee the sea-borne component of the evacuation of all 35,000 of its expats from Libya in February 2011. The PLA Air Force also sent four IL-76 long-range transport aircraft to evacuate Chinese nationals from central Libya. Following the murder of 13 Chinese sailors on a cargo vessel on a Thailand-controlled portion of the Mekong River, a Chinese paramilitary People’s Armed Police (PAP) border unit began joint patrols on the river with its Thai, Lao and Burmese counterparts.

These successful operations, and the fact that the PLA Navy just took delivery of its fourth Type 071 amphibious warfare vessel, raise expectations at home that Beijing will protect its own. The first aspect of this push is likely to come via improved consular service to keep track of Chinese citizens abroad, apprise them of risks, and assist in evacuation and rescue operations.

In response to the abductions in Egypt and Sudan, Zhejiang University’s non-traditional security center director Yu Xiaofeng and his colleague Gan Junxian penned an op-ed in the Chinese edition of the Global Times calling for expanding consular protection of Chinese overseas based on best practices of the U.S., UK and Japanese governments. China’s Foreign Ministry issues travel advisories and coordinates evacuations of citizens in emergencies, but so far has not played the hands-on protective role that its American and other Western counterparts do.

Opportunity for Private Security Contractors

Private security contractors are also likely to play a larger role in protecting Chinese workers overseas, since they can provide an armed presence in a less escalatory way than direct deployment of military or police forces in foreign countries. The Sudan incident appears to herald a new factor in protection and recovery of Chinese overseas workers: As The Wall Street Journal reported, Sudanese troops engaged in the rescue effort were joined by a dozen armed Chinese private security contractors. Among China’s emerging private security providers, Shandong Huawei Security Group advertises an “Overseas Service Center” based in Beijing that includes personnel drawn from retired military special forces and the PAP. While the source of the contractors who may have assisted in Sudan remains unclear, Shandong Huawei or one of its brethren seem like a probable source.

The idea that Chinese companies would hire private security providers to help them manage risks in volatile frontier areas has been in discussion for some time. In the spring of 2010, a prominent Western private security firm told us that a number of large Chinese firms use its services and that it had “definitely seen an increased interest” from Chinese energy, natural resources and construction firms seeking expert advice on the political, operational and security risks associated with their investments and projects in Africa, Middle East and other far-flung locations.

We suspect these firms’ expertise in risk management will be increasingly welcome in Chinese boardrooms and investment sites abroad as Beijing’s rising profile forces it to take sides in local conflicts where Chinese citizens live and work, thereby attracting popular anger and potentially fueling additional violence against PRC expats. Beijing might ultimately rather see private contractors on the front lines than risk the diplomatic fallout that could result from sending active duty military or police personnel into conflict zones to protect Chinese workers and economic assets. Controlling the actions of private security firms will be a key concern for Beijing, however, particularly following Washington’s problems with doing so in Iraq.

An additional complicating factor is that private security services are expensive. Cash-strapped Chinese small businessmen might instead choose to arm themselves, which could further escalate any confrontations that might occur with locals. On 15 October 2010, for instance, Chinese supervisors Xiao Lishan and Wu Jiuhua—allegedly acting in self-defense—shot 13 Zambian miners out of a larger group protesting wage conditions at Collum Coal Mine, a major coal supplier for Zambia’s copper and cobalt sector. While Zambian prosecutors dropped the case in 2011, it generated outrage among locals, who resent the leverage Chinese companies obtain from investing over $1 billion a year and building most new infrastructure.

Individual PRC nationals working as traders and businessmen in volatile areas often work unregistered and will likely be invisible to Beijing until a high-profile attack or systemic anti-Chinese violence erupts. Once this happens, nationalist pressures to intervene and protect will kick in and the Chinese government will be placed in a reactive position. Beijing looks to be in for an interesting time as more PRC citizens and China-based companies venture into Iraq and Afghanistan in search of economic opportunity.