August 16, 2021: China has lots of problems with its overseas investments, especially in Asian and African nations where security is weak and Chinese projects are seen as a vulnerable target for bandits and other armed locals who consider foreign facilities and construction projects as a source of illicit income. Western companies will often hire PSCs (Private Security Contractors) to protect their investments when local security forces cannot. The PSC personnel are usually former military and police and many are veterans of PMC (Private Military Contractors) who provided security for American and other foreign bases in Iraq, Afghanistan and a few other areas after 2001. While the PMC employees were paid more than military personnel, they did not have to be trained and allowed the Western military forces to concentrate on fighting rather than a lot of them guarding bases and supply lines.

China has nearly sixty million retired or former soldiers and police who often hold public protests over inadequate pensions. China does not want to use any, or at least many, of these former soldiers as PMCs because during the 1990s China passed a series of laws making it impossible for any Chinese except active duty military and police to handle firearms. China has nearly half a million unarmed PCS personnel. Most are employed in China to protect the growing number of valuable facilities and all are banned from carrying firearms. The PSCs depend on the quick response of local police when there is an armed threat as well as a growing number of non-lethal devices to deter or disable trespassers. This is probably a wise strategy because in many parts of China local officials are corrupt and that includes police personnel. The illicit violence of these police continues to be a major cause of unrest and public protests in China. The number of these protests each year was made public until the numbers reached over 100,000 protests a year, at which point the data was no longer made public and declared a state secret. Using other indicators, it was found that the number of protests has not been declining. To deal with this China has 1.5 million personnel in the PAP (Peoples Armed Police) which, as the name implies consists of special armed police units for handing riots and other large security problems. Not all those PAP are riot police or commando units because the PAP consists of administrative, logistic and training organizations. In addition, there is the national local police, which has 20 percent more personnel than the PAP. Together these two police organizations have combined budgets nearly equal to the military budget.

Chinese companies, especially government owned ones, are investing trillions of dollars in overseas projects, many of them to gain access to raw materials or to pay for the BRI (Belt and Road Initiative) to create a land and maritime transportation built, and often controlled, by China to expand Chinese trade, influence and control. BRI is concentrated in Asia and Africa and most of it is in countries with serious internal security problems.

China insists on special terms for these investments, especially in areas where the local workforce is unreliable and less efficient than Chinese. The investments do not happen unless the Chinese can import Chinese workers. This is unpopular in those countries which expect foreign investors to hire local workers.

There is another problem for countries accepting these Chinese investments. Put simply, if a country allows Chinese investment on a large (multi-billion dollar) scale, the deal usually involves permitting imported Chinese workers establishing their own Chinese settlements and then stay when the project is over. This sort of thing results in the Chinese establishing a permanent economic presence and control over a growing percentage of the local economy.

The most visible example of this is Africa where since 2000 Chinese use of these “invasion” tactics have become a growing problem for China as well as the nations invaded. The most troublesome, for all concerned, side effect is the growth of intense anti-Chinese attitudes by resentful and still unemployed locals. The bad relations began when Africans realized that the Chinese brought their own workers and employed fewer locals for construction projects China was paying for. Over time fewer and fewer locals were used. This gave the Chinese greater control over projects, usually related to construction (buildings, roads, and the like) or mining.

The Chinese point out that using their own workforce ensures that the project will get done on time and on budget. But there is a downside to the use of imported workers. It is easier for the Chinese to ignore local advice, which leads to construction practices that work back in China but not in various parts of Africa. Construction practices that work in some parts of China often do less well in various parts of Africa. Another problem is that the locals often have different attitudes towards use and maintenance of the new facilities. Often after a decade (or even less), Chinese projects are falling apart because of misuse and lack of maintenance.

The Chinese workers live separately and rarely mix with locals, giving rise to suspicions that they are Chinese convict labor. There’s no evidence of that, and Chinese managers everywhere tend to be very intent on tightly controlling work they are responsible for. Many of these workers stay after the project is completed and go into business locally.

These Chinese construction projects please the local African officials because the Chinese get the job done quickly and with minimal problems from locals. Neither the local politicians nor the Chinese are concerned with long-term problems. While China has been generous with business deals in Africa, and sent about a million Chinese to work, invest, or settle there, local tyrants are favored as partners. That's because these thugs are shunned by Western nations and businesses. Because of this, China is increasingly seen as a supporter of evil governments and that has generated widespread African hostility towards all things Chinese. This has led to anti-Chinese riots in some countries and a general animosity towards the Chinese at the grass roots level. Thus when these countries go through their next rebellion, Chinese are likely to be a popular target and a major loser if the rebels win. These problems exist, to a lesser extent, in the Middle East and Asia.

China has been at this for since 2002. This really kicked into high gear when China declared 2006 was officially "The Year of Africa." China went all out to make a favorable impression on African governments and increase Chinese economic and diplomatic activity in Africa that year. To that end, about a billion dollars-worth of debts, of African nations to the Chinese government, were forgiven. The year before, Chinese commercial and government organizations invested over $13 billion in Africa. This was less than one percent of China's GDP but by African standards, it was a huge investment.

However, there was some blowback. The Chinese were mainly after raw materials, especially oil. A lot of that $13 billion was bribes for local officials. As usual, the average African was getting screwed by these deals. China is also flooding African markets with inexpensive goods. This and imported Chinese workers are hurting local businesses and causing unrest among African business owners and workers. As a result, it's become common for opposition parties in Africa to accuse China of "neo-colonial exploitation." The accusation fits, and the Chinese will pay for it down the road, as will peacekeepers brought in to help clean up the mess.

Despite all the overseas security problems, China refuses to use armed Chinese PSC personnel. The only exception is PSCs who supply Chinese armed guards for Chinese ships moving through dangerous areas, like the Somali coast or the Gulf of Guinea and the Niger River Delta. These armed ship guards are carefully selected veterans of Chinese army or PAP units.

In most cases the overseas investments use unarmed PSC personnel to supervise, and sometimes train, armed locals to provide security. The Chinese pay well and have a reputation of covert retaliation against any of the armed locals who go rogue and endanger Chinese or Chinese projects. In some cases, like Pakistan, China insists that the local government form a large (30,000 in Pakistan) armed security force dedicated to protecting the Chinese workforce and construction projects. China offers other financial incentives to the Pakistani government to ensure cooperation and, so far, it has worked despite a few Chinese getting killed. Pakistan points out that the perpetrators suffer much higher casualties. China is considering a similar program in Afghanistan if the current Western supported government is overthrown by the Pakistani-backed Taliban and smaller numbers of Iranian backed Taliban and anti-terrorist militias. As attractive as investing in Afghanistan is given its trillion dollars’ worth of unexploited minerals, the risks appear much higher than in Pakistan or other Central Asian nations. China has another problem with many of these overseas and BRI investments failing and contributing to the debt crisis the Chinese financial system is having a hard time handling.