China and the World

Patriot games

Prominent former US SEAL’s Silk Road venture

Erik-Prince-w

Prince and the (red) revolution

When Islamic State announced that it had killed two Chinese nationals in Pakistan last month bellicose netizens called on Beijing to send in the army.

“How much blood needs to be spilt before you act?” asked one. “Fight fire with fire,” urged another.

The comments were quickly censored, because, of course, China doesn’t want to dispatch troops to its troubled neighbour.

But it does raise an interesting question: if Xi Jinping’s Belt and Road Initiative requires more Chinese to work in dangerous, unstable places, who will protect them?

Oddly, the answer might be Erik Prince: former US Navy SEAL, founder of the now defunct security company Blackwater, and brother of US education secretary Betsy Devos.

Prince’s new company Frontiers Services Group focuses on helping Chinese firms working along the New Silk Road. Frontier is 25%-owned by a unit of Chinese state giant Citic Group. Unsurprisingly, Prince has become a vocal supporter of the Belt and Road plan despite the fact that Washington is somewhat suspicious of its motives. “China trading with its neighbours and building infrastructure brings only benefits,” he told the Financial Times recently.

To some, Prince’s shift away from his role as an auxiliary to the US government to support its geopolitical rival, Beijing, is a form of treachery, only confirming the view that he has been a mercenary for hire all along.

But Prince denies he is hurting US interests by working with Chinese companies or that he is motivated by revenge.

Prince claimed in his 2013 book Civilian Warriors that US politicians had hung his company out to dry. “After failing in their multi-year effort to win hearts and minds in Iraq, the bureaucrats decided a company that had repeatedly answered this government’s pleas for help was more useful as a scapegoat,” he wrote.

Prince sold Blackwater in 2010 amid mounting legal problems. In 2014, a US court found four of its guards guilty of killing 17 Iraqi civilians in Baghdad in 2007.

Prince insists the Hong Kong-listed firm is not a new Blackwater. After a 40% rise in share price so far this year, the company is worth $250 million.

Beijing vehemently opposed the 2003 US invasion of Iraq but Prince says past affiliations haven’t hurt him in China.

“What they look at is our 100% success rate,” he told the FT. “If the Chinese are sensitive about anything, it’s not having their people die.” While 41 Blackwater operatives were killed during the company’s operating history, no one under Blackwater’s protection ever perished, he says.

Frontiers was formed in 2014 to help energy and mining firms in Africa but when Belt and Road started becoming a reality it switched focus. Last month it agreed to buy a 25% stake in China’s largest private security academy – the International Security and Defence College in Beijing. Courses at the school teach crisis management planning, risk assessment, basic close protection, counter carjacking and cultural awareness.

Meanwhile Frontiers Services Group is also building two “forward operating bases” in China. One in Yunnan is to assist clients working along the southwest routes of the New Silk Road and the other is in Xinjiang, the launch point of the northwest routes. The Yunnan base is expected to open this year and the Xinjiang base in 2018.

So how is the Chinese media presenting the arrival of one of America’s most controversial businessmen? Weirdly, having the “mercenary king” protect Chinese businesses seems to be seen as something of a coup.

“Prince has extensive personal qualifications,” wrote the Global Times, “White House intern, American navy SEAL and second-generation rich Republican.” The state-backed newspaper added: “Western media have this wrong idea that anything involving China is bad, so Prince’s cooperation with China is also bad.”

Certainly his security teams will be kept busy in Pakistan, where Baluchistan separatists view Belt and Road projects as prime targets and made it one of the most dangerous places in the world for Chinese to work.


© ChinTell Ltd. All rights reserved.

Brought to you by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.