China’s response to mounting maritime perils: private security firms, high-seas arms caches

Chinese private security companies have been forming their own response to attacks on Red Sea shipping by Yemen’s Houthi militant group
The challenge for Beijing lies in effectively regulating the industry – and avoiding the examples set by Blackwater in the US or Russia’s Wagner Group

Alessandro Arduino

Published: 1:00pm, 28 Dec 2023

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Maritime security is back in the global spotlight after a Yemeni militant group, the Houthis, began engaging in marauding activities in the Red Sea. While the US is leading its own multinational coalition to safeguard commercial traffic along the essential maritime route, Chinese private security companies have joined together to form their own response: the Alliance of Security and Risk Management Companies.

More than 70 representatives from both Chinese and global security firms met in Macau last month to coordinate the endeavour, which focuses on the maritime security needs of China’s Belt and Road Initiative.

The Houthi’s attacks have focused on the Bab el Mandeb choke point in the Red Sea. The strait is a crucial component of one of the world’s most essential maritime routes, connecting the Mediterranean to the Indian Ocean. It facilitates the constant flow of millions of barrels of oil every day and contributes to 12 per cent of global trade.

The Houthis started their marauding campaign in late November by hijacking the commercial vessel Galaxy Leader, citing their backing of the Palestinian cause against Israel.

Today, the threat spectrum has broadened. It’s no longer just Israeli-owned vessels in the cross hairs but anyone traversing the Bab el Mandeb strait, dealing a significant blow to global trade and energy security.

While the United States has assembled a coalition to provide military escort to commercial vessels, most Arab nations bordering the Red Sea have refrained from joining the initiative – a stance that might embolden the Houthis to escalate their assaults further.

The Chinese private security sector also aims to address this security void, with a pivotal role being played by Huaxin Zhongan Group, a Chinese company that helped drive the creation of the Alliance and a major force in maritime security solutions.

Several international security firms taking part in the Alliance’s annual meeting in Macau specialise in advanced maritime security, encompassing anti-piracy measures, anti-drone capabilities, and naval demining. These companies offer logistical services aimed at bolstering security at sea, including the intriguing concept of floating armouries, a topic ripe for exploration and deeper analysis.

Over the past decade, the number of floating armouries have risen in response to widespread piracy in high-seas regions and strict national rules governing heavy firearms. These armouries serve a crucial role: avoiding the restrictions on private security forces bringing guns into the ports of many countries.

Essentially, these ships act as offshore storage hubs for security firms, allowing them to stash weapons and transport armed guards to protect ships.

10:26

Yemen’s Houthi fighters behind Red Sea attacks threaten to disrupt global trade

Despite being composed predominantly of Chinese private security companies, alongside Chinese-led associations like the China-Africa Business Council, the Alliance’s plans to thwart naval hijackings in the Red Sea and the Gulf of Aden – as well as strategies to counter high-value individual kidnappings and ransoms in countries signed up to the belt and road plans – have drawn in a diverse array of global security practitioners, spanning Russia to Pakistan and South America.

Global participation underscores a key concern long championed by Chinese security pundits: the imperative for higher standards in professionalising the Chinese private security sector, enabling these firms to operate overseas proficiently.

However, Beijing intends that no single private security company reigns supreme. Beijing’s goal isn’t to emulate the American-funded private military company model of Blackwater or replicate the paramilitary organisation camouflaged as a private company, as seen with Russia’s Wagner Group.

The Alliance underscores how Chinese private security firms are poised to wield a burgeoning influence, safeguarding Chinese interests and bolstering security capacities in a domain where the distinction between private and public realms is often blurred.

Newly-recruited members of the Houthis’ armed forces hold up weapons during a parade in Sanaa, Yemen, on December 2. Photo: EPA-EFE

The mounting uncertainty fuelled by the Houthis, who have disrupted a crucial sea route responsible for more than 40 per cent of China’s hydrocarbon transport, has Beijing strategising along two fronts.

First, a top-down approach may see Beijing exert pressure on Iran to rein in the Yemeni militant group it supports. Simultaneously, China could pursue a bottom-up strategy, elevating the role of Chinese private security firms in tackling escalating overseas security threats.

While Beijing remains firm on restricting access to weapons for private security companies, pushing them to rely on armed personnel from local or international entities, the adoption of cutting-edge technologies – ranging from electronic interference devices and other anti-drone capabilities – might soon become commonplace aboard commercial vessels.

Yet, the substantial expenses linked to deploying and maintaining such cutting-edge technologies, encompassing naval demining and anti-naval drones, are counterbalanced by the surges in insurance premiums following the Houthis’ attacks.

Additionally, the choice of numerous operators to redirect oil tankers around Africa, lengthening transit routes and causing delays, further contributes to this cost offset.

As China expands its global economic and diplomatic reach, reliance on private security firms is inevitable, despite initial reservations. However, steering clear of the Blackwater or Wagner model poses a challenge for Beijing in effectively regulating this burgeoning industry.

Alessandro Arduino is an affiliate lecturer at the Lau China Institute and King’s College London. He is the author of Money for Mayhem: Mercenaries, Private Military Companies, Drones, and the Future of War.

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