China in Africa
6. The Role of Chinese Institutions in the Acquisition of Business Intelligence
A
discussion
on
China’s
business
entry
into
the
African
continent
is
incomplete
withouttaking
into
account
the
covert
role
played
by
that
country’s
intelligence
organs
in
servingthe
economic
interests
of
the
state.
Unlike
Western
corporations
which
predominantlypursue
strategic
business
decisions,
independently
of
state
intelligence
structures,
majorChinese
companies
enjoy
a
close
interlock
with
the
intelligence
community
throughappropriate
channels
of
authority
and
individuals
sitting
in
strategic
management
positions.
Part
of
the
state’s
national
economic
planning
needs
require
a
clear
understanding
of
thestrategies,
business
and
production
plans,
marketing
strategies
and
pricing
formulas
ofglobal
competitors.
Given
that
Chinese
companies
work
in
tandem
with
the
state’seconomic
and
developmental
strategic
plans,
such
information
is
a
necessary
requirementto
ensure
proper
alignment
of
companies
with
the
state’s
economic
objectives.
Consequently,
linked
to
China’s
growing
energy
and
resource
acquisition
arrangementswith
African
countries
and
regional
organisations
has
been
its
ever
growing
intelligenceoperations
coinciding
with
an
increasing
presence
of
Chinese
intelligence
personnel
on
thecontinent.
Leading
the
charge
has
been
the
Ministry
of
State
Security
or
Guoanbu,
thePLA’s
Department
of
Military
Intelligence
(DMI)
and
the
all-powerful
Ministry
of
Commerce(MOFCOM
-
the
defacto
head
of
China’s
economic
and
business
intelligence
gatheringand
evaluation
structure
in
the
country.
Whole
sub-departments
fall
under
these
agenciesdealing
with
economic
intelligence.
All
negotiations
with
foreign
governments
and
business
entities
are
the
subject
of
ongoingassessments
by
a
number
of
PRC
intelligence
structures.
The
systemized
collection
ofeconomic
information
and
the
institutional
memory
of
the
Chinese
state
is
thereforesteered,
defended
and
maintained
by
the
intelligence
service
apparatus
directly
andthrough
its
mandatory
presence
in
all
strategic
organs
of
state.
This
includes
mostsignificantly
the
oil,
coal
and
steel
sectors.
6.1. The Ministry of State Security
The National Security Ministry better known as the Ministry of State Security (MSS), is thecountry’s single most important strategic intelligence service, enjoying both an internal andexternal function. It works heavily in the industrial intelligence field as spy/counterspy/analyst/researcher/operative, through its Second Bureau, Eighth Bureau EconomicOffice, 10th Bureau of Science and Technology, and the infamous Technical Department(Jishubu), which spends a considerable resources on spying and monitoring foreignbusinessmen.
Guoanbu’s Director, Security Minister and master spy Geng Huishang, is an expert ineconomic/business/trade intelligence, protection and penetration of business secrets,patents, and also of American and European politico-military affairs.
The new PRC intelligence chief - General Huichang (on left).
The Guoanbu also specializes in determining the strategicenvironment in selected countries which may be the target ofChina’s commercial interests or the source of contractors workingon Chinese contracts, by scrutinizing decision-makers, statistics,media, and by the deployment of strong human intelligence(HUMINT) and signals intelligence (SIGINT) assets, whenever needed.
6.2. The Intelligence Role of Mofcom
The Ministry of Commerce (Mofcom) also plays a critical role and boasts some of theworld's top economic intelligence gathering units. While it is predominant with regards tothe government’s formal interface with foreign commercial interest groups, it also has subintelligenceunits dealing with economic information gathering. According to the Frenchpublication, Intelligence Online , MOFCOM works closely with the MSS, with key agentsfrom the latter assigned to ministry positions as special staff.
Their mission is to accompany China’s massive economic change on the world economicstage by such actions as gaining headway within the World Trade Organization (WTO),negotiating intellectual property agreements, hammering out trade strategy, acquiring newtechnologies and forming joint ventures with key overseas actors. [See Annexure III.]
Importantly, unlike other countries, the dividing line between state and private enterprise isdeliberately blurred, with individuals wearing many hats. A Chinese business leader mayhead a Chinese company with state share-holding. He may also report to MOFCOM andbe a member of the MSS or some other high ranking CCP official working in one of themultitude of research organisations or think-tanks.
To make things more complicated, the MSS also has “allocated” places in this unit, as asuitable cover for travelling abroad on economic missions, attending internationalconferences and complicated trade negotiations. Chinese “business delegations” areinvariably filled with MSS/MOFCOM operatives to provide background intelligence andsum up opposition negotiating positions and provide relevant advice to business officials.This was certainly the case when Chinese oil executives were looking into investing in SaoTome’s offshore oil sector back in 2003/2004 in conjunction with Nigerian oil interests.
This constitutes a major challenge to foreign companies when dealing with Chinesebusinessmen generally, namely which “hat” is being worn. Is it a business, party official,ministry or security/intelligence label? Similarly discussions with MOFCOMrepresentatives are fundamentally problematic in that they invariably have intelligenceconnections to China’s state security services.
MOFCOM draws its information from in-house commerce ministry services such as theDepartment of International Trade and Economic Affairs overseen by Assistant CommerceMinister Yi Xiaozhun and headed by the director Sun Yuanjiang, as well as from a host ofthink tanks and institutes, which have sprung up over the past decade. Among them arethe Foreign Trade Research Institute, the National Economic Research Institute of Beijingand the Shanghai Economic Research Institute.
MOFCOM’s intelligence experts also work hand in glove with the counter-intelligence unitof the MSS (Guoanbu) ministry, and in particular with its Department 17 run by TianGengren, as well as with the "Enterprises" office founded in 2000 by Chen Quansheiig.
Some of MOFCOM’s economic, business and financial information is processed by theChinese Communist Party's United Front Work Department (UFWD). The UFWD's 5thBureau was set up by Hu Deping, son of former leader Hu Yaobang, who is also directorof the Chinese Private Economy Research Society.
In the African environment, MOFCOM is increasingly supplying Chinese companies withinformation relating to trade and investment opportunities in Africa. The economic andcommercial sections of Chinese embassies in Africa are also now more active in collectinginformation to be passed on to Chinese companies. Known as Economic and CommercialCounselor’s Offices (ECCO), they normally have well-maintained Web sites reporting localprojects with Chinese involvement, and are in close contact with events on the ground.
Additionally, Chinese intelligence agencies and related advanced technology commercialorganisations are often linked together through "guanxi" (pronounced "gwan-shee") socialrelationships and connections (i.e. insider knowledge needed for bureaucratic approvals,finding the right person for the job, tips on new opportunities, etc.). Such guanxi networksare a fundamental component of modern Chinese intelligence operations and are alsorelated to the "united front" approach.
A related concept is hui guan, or a place association for those who originated in a commoncounty or village. As the old Chinese saying goes, "one’s body might be in a foreign land,but his heart is back in the motherland" (shen zai caoying xin zai han). This has farreaching implications when understanding the role played by Chinese expatriates abroadwhich act as a reservoir for intelligence gathering, local networking and influencingoperations. [See below.]
Importantly, the united front approach is reinforced by business, personal, family andfactional linkages that often transcend the formal chain-of-command. These unofficialrelations reinforce the integrated nature of China’s decision-making institutions. Unliketheir Western counterparts, Chinese institutions are informally more integrated.
6.3. The MSS in Africa
Countries that have undergone an expansion in Chinese security personnel includeAngola (to assist China’s entry into the country’s energy sector and open back-channels toSao Tome Principe); Guinea Bissau (to monitor Taiwan’s relations with Gambia); Senegal(to monitor Taiwanese activities in Dakar before Senegal switched sides in October 2005),Niger (to monitor Taiwan’s relations with Burkino Faso and the movement of Islamicmilitants possibly linked to the Uighurs from Xinjiang Province); Nigeria (to satisfy China’sexpanding strategic interest in energy resources and new markets); Sudan (which until therecent peace accords, was used to monitor and provide tactical information of rebelmovements across the country, as well as developments in Darfur); Egypt and Algeria (tomonitor the movement of Chinese Islamists [Turkestani Uighurs] across North Africa);South Africa (given its strategic locality and importance in the developing world); andMozambique (given its strategic location on the Indian Ocean and its proximity to Taiwansupported Swaziland).
Higher concentrations of MSS personnel have been a recurring pattern wherever Chineseoil companies make new investment forays into unchartered territory. Some of thehighest concentrations of MSS personnel in Africa are found in Egypt, Sudan, NigeriaAngola and South Africa. Of the five, only South Africa and to a lesser extent Egypt is notrelated directly to oil investments. The increase in MSS’s presence in Luanda and Nigeriawas geared not just at assisting with Beijing’s growing involvement with the local oilindustry but also due to their proximity to Taiwan’s African allies i.e. Liberia (beforeswitching diplomatic relations in October 2003), Gambia, Burkina Faso and STP. Sudanbecame the primary launch pad for Beijing’s foray into Chad when the latter enjoyeddiplomatic relations with Taiwan prior to 2006.
Importantly meetings between MSS/Chinese diplomatic officials and their Chadiancounterparts often took place outside the target countries to evade detection by Taiwan’ssecurity services. The Chinese diplomatic Corp at the United nations (UN) played apivotal role in this respect.
6.3.1. The Role of Local Embassies
Most PRC embassies in Africa have MSS sections embedded in them, and in someinstances ambassadors or charges’ are themselves reported to be senior MSS officers (forexample Guinea Bissau and Liberia).
The PRC embassy in Pretoria, for example, is very active in collecting information on theSouth African economy, while another key processing conduit of economic intelligence inthe region is the Chinese embassy in Maputo. They also make numerous requests forspecific information on economic opportunities in South Africa and for meetings with SouthAfrican business leaders.
In
Harare,
members
of
the
MSS
detachment
were
activated
in
late
2005
to
draw
up
anassessment
of
growing
anti-Chinese
sentiment
building
up
in
the
region
over
cheapChinese
imports.
The
MSS
suggested
in
its
memo
a
number
of
possible
solutions
togrowing
opposition
to
Chinese
exports:
- Pledging funds for local development, taken from profits generated by the sale of Chinese products in African countries.
- The continued or renewed support for trade union, farmer and shopkeeper associations in Africa, including invitations for job training programmes, seminars, etc.
- Holding specific seminars for business/economic journalists to promote the Chinese case.
- Promising funds to develop African sectors feeling most threatened by the "Chinese invasion".
West Africa has also become a particularly active region for Chinese intelligence activities.The PRC embassy in Nigeria has been reinforced with additional MSS intelligencepersonnel, on several occasions in the past few years. The mission serves now as C3I forintelligence activity towards STP, US interests in the area, as well as the movement ofTaiwanese operatives and businessmen in Nigeria and Gabon.
Other PRC missions that have been reinforced by additional personnel are the embassiesin Bissau and Guinea Conakry, to monitor developments in Senegal and Gambia. Theformer Chinese ambassador to Guinea Bissau and current Ambassador to Mozambique,Tian Guangfen, has been identified by French intelligence (DGSE) as a senior MSSoperative.
According to sources in the region, the PRC at one stage had as many as 30 specialistMSS agents inside Liberia alone, in the lead up to the presidential elections in October2005 to detect any possible financial assistance Taiwan might have been rendering toLiberian presidential candidates.
China has also been closely monitoring the situation in Cote d’Ivoire as well as theactivities of the Burkina Faso government that is seen to be destabilizing Chinese allies inthe region such as Abidjan and Mali.
Intelligence assets, though usually attached to Chinese embassies, are also found inChinese companies, especially media organisations; so-called fraternal Chineseassociations and China’s ever-growing number of peace-keeping forces on the continent.Here media outlets such as the New China (Xinhua) news agency plays an important rolein this regard with journalists acting as information conduits back to Beijing on a multitudeof issues of interest to Chinese leaders. Assets in the Chinese expatriate communitiesalso play a vital role and liaise closely with embassy personnel. .
6.3.2. The Acquisition of Business Intelligence
Business intelligence plays a vital role in guiding China’s energy resource acquisitionprogramme. Not surprisingly, Chinese intelligence services are closely linked to majorChinese companies. These include Baosteel, CITIC, CNPC, the PLA aligned ChinaOverseas Shipping Corporation (COSCO), involved in the shipment of raw materials toChina; Huawei, ZTE, Merry Glory, Semi-tech, ZMC, etc; and use these companies tocollect precious intelligence. This is also relayed via the State Body for Science andTechnology (SSTC). Chinese companies are also used as cover for the infiltration ofChinese intelligence assets into targets countries masquerading as employees of thesecompanies. It also provides them with a cover to understand the local environment andinterface with local decision-makers to strengthen Chinese political institutions in theirdiplomatic offensives in such countries. In this respect Chad was a classic example ofhow Chinese oil companies were in fact the vanguard or the conduits of China’s unofficialeconomic and political engagements with the opposite political numbers in Chad,notwithstanding the latter’s political relations with Taiwan pre-2006.
That China is targeting foreign competitors in the energy and natural resources sectorshas been lent credence by reports received that Chinese intelligence officials had beengathering information on De Beers Diamonds during the course of 2005 doing explorationwork in the Central African Republic (CAR), on behalf of another foreign company in thearea.
The line of investigation included enquiries made by the Chinese embassy in Bangui forCVs and background information on in country geologists and managers working DeBeers. Sources in the country state that this line of enquiry was known to the Chineseambassador to Bangui, He Siji. The same Chinese official also tried to obtain certainagreements signed between the CAR government and the prospective mining company.
This once again highlights the symbiotic relationship that exists between Chinese companies, MOFCOM and China’s state intelligence apparatus.
The private enquiries that were being conducted by MSS elements in the embassy were reporting directly to a "working group" under one of the company’s managers.
6.4. The Role of the Chinese Expatriate Community
The Chinese expatriate community in Africa plays a crucial support role in China’sengagement with the continent. Chinese intelligence utilizes the services of Chineseimmigrants in foreign countries to gather intelligence. A broad range of professionals,experts, students, businessmen, and others with well-established local contacts in aforeign country can be utilized as information conduits by Chinese intelligence agencies.
Just how many Chinese are in Africa is unknown. Figures range from 500 000 to onemillion. In 2004, South Africa’s Department of Foreign Affairs (DFA) estimated that theremay be as many as 250 000 illegal Chinese immigrants in South Africa alone. Largenumbers of Chinese businessmen have come to South Africa legally over the last fewyears and established businesses. The concentration of Chinese businesses in the BrumaLake area of Johannesburg, for example, is run by a number of Chinese businessmen whoare in South Africa legally. However, many Chinese businesses in the rural areas are nowrun and staffed by illegal Chinese immigrants.
The DFA has become increasingly frustrated by this problem and by the PRC embassy’srefusal to take responsibility for illegal Chinese immigrants in South Africa. The PRCEmbassy continually maintains that these individuals entered South Africa on their ownaccord to conduct legal business and are not the responsibility of the Chinese government.The PRC Embassy also argues that Chinese immigrants in South Africa should beconsidered a positive factor, as they set up new businesses and “create jobs.” However,DFA argues that any new jobs created are only for the Chinese businessmen themselves,their family members or other Chinese persons in South Africa.
The Chinese are prevalent in a number of other countries in Africa. In Angola, theChinese population in Luanda alone is estimated in the region of 80 000 to 100 000. TheChinese embassy in Mauritius estimates that there are 30 000 Chinese expatriates on thistiny island. Government officials in the Ministry of Foreign Trade in Sudan estimate thatthere are over 16 000 Chinese residents in Khartoum alone with another largeconcentration in Port Sudan. Nigeria has a large Chinese expatriate community which isactive in local economic associations.
Given
the
nature
of
the
Chinese
Communist
Party
(CCP)
and
the
social
dynamics
whichlink
Chinese
communities
together
–
they
offer
significant
platforms
of
influence
in
theirrespective
countries
of
abode.
This
is
due
to:
- There reluctance to assimilate with locals
- Their loyalty and dependency on China
- Family members who are left behind
- The political connections of the communist party whose influence extends far into the reaches of Chinese civil society
- The debt of gratitude they owe the Chinese government for letting them pursue their business interests overseas
- There vulnerability to threats of blackmail, extortion and intimidation against their family members left behind in China should they not be willing to serve the state.
Thus they become a source of information on local business conditions that is fed back tothe Chinese government. As one US intelligence official explained: “Wherever there is aChinese community, the CCP is going to try and infiltrate, if they haven't done so already”.
Local Chinese expatriates are also active in local Chinese business associations and socalledfriendship associations to a) leverage Chinese influence in such countries, b)undermine Taiwan’s economic influence in Africa and c) provide a source of information onlocal economic and business developments. These friendship associations promoteconstant contacts with the PRC, through trips, seminars or "good will" visits of African andChinese dignitaries.
Some
of
these
organizations
include
the
following:
- Association for Peaceful Reunification of China (Wang Kebin)
- China Council for Peaceful Reunification (Wang Chengyu)
- Taiwan Straits Peaceful Reunification Association (Liang Su Yung)
- All China Overseas Chinese Federation (Li Zupei)
- The African-Asian Society (Patron Essop Pahad – former Minister in the South African President’s Office)
One of the main driving forces behind this “active measures” effort has been the All AfricaCouncil for the Promotion of Peaceful Reunification of China (AACPPRC) initially based inSouth Africa and headed by Donald Wong from Gauteng, the ex-head of the TransvaalChinese Association, who is said to have been close to former Chinese vice premier QianQichen.
The “peaceful reunification of China” strategy first emerged at the AACPPRC’s 7thplenary session that took place in Johannesburg on 19 January 2004. The Johannesburgsession was presided over by two veteran Chinese heavyweights: Vice-President of thestate run Association of Chinese Friendship, Li Zupei (ex-ambassador to Ghana), andpolitical party veteran Liang Su-Yung, head of TSPRA and ex-parliamentary speaker.
Donald Wong, the head of the Transvaal Chinese Association (and previous head of theGauteng Chinese Association), took charge of the preparations and logistics, and statedthat even when Chinese people no longer speak their languages, they know where theycame from, and where “their heart belongs”.
Then PRC ambassador to South Africa, Liu Guijin (now Special Chinese Envoy forSudan), was also present at this meeting, as were Wang Kebin, head of the AfricanAssociation of Peaceful Re-Unification, reportedly a senior MSS officer; Zhang Manxin,head of the European section; and Tang Shubei, who supposedly heads a group thatdeals directly on the question of Taiwanese “sympathisers”.
Other institutions present were the Office of Overseas Chinese Affairs (under the StateCouncil), the Chinese People’s Association for Friendship with Foreign Countries, the“Youth Federation”, the Taiwan Democratic Self-Government League, and members fromthe Taiwan Affairs Office of the CCP (long time headed by Chen Yunlin, Li Bingcai andTang Shubei).
6.4.1 The Nigerian Connection
Then come the regional groupings. One of the most influential ones is the West AfricaCouncil for the Promotion of Peaceful Reunification of China (WACPPRC), founded inLagos on 8 July 2004 and headed by Hong Kong based businessmen Cha Jimin. Itsupposedly gathers national councils involving all the West African countries. The Lagosmeeting on 8 July involved some 200 delegates and invited guests.
Addressing the meeting, Cha Jimin said that the establishment of the WACPPRC "is abridge linking the Chinese people in west Africa and other parts of the world to strengthenfriendship between them and further expand exchanges in the fields of economy, trade,sciences and technology and culture."
In his address to the meeting, Wang Changyu, deputy secretary general of the ChinaCouncil for the Promotion of Peaceful National Reunification, said the establishment of theWACPPRC "will surely play an important role in enhancing unity and great union amongthe Chinese people and carry forward the global movement to oppose the 'independenceof Taiwan' and promote the peaceful reunification of China."
Local managers of Chinese multi-national firms were appointed as "chapter heads" of suchregional entities. This is the case of electronics enterprises like Xeon (important inNigeria), ZTE or Huawei, banks or general trade firms.
Finally,
there
are
the
national
and
local
councils
and
chapters
of
this
greatersuperstructure,
corresponding
to
countries
and
provinces.
The
most
active
on
thecontinent
is
the
Nigerian
China
Friendship
Association
(NICAF)
headed
by
VN
Chibundu.Such
friendship
societies
serve
multiple
roles:
- Targeted influencing of local politicians and businessman
- Political and economic intelligence gathering
- Chinese cultural indoctrination programmes.
Importantly, most of these groupings are directly linked to PRC intelligence officers(specifically MSS), in order to detect Taipei’s diplomatic and economic movements on thecontinent and to promote intelligence gathering – within wider circles many times byinvoluntary sources - among larger crowds of residents, nationals or expatriates. Therehave also been reports that Chinese nationals have been encouraged to organise themselves into informal intelligence organisations to serve Chinese interests.
To date about 170 similar chapter organizations have been established in more than 80countries and regions to promote peaceful reunification of the Chinese mainland andTaiwan.
目次
- 1. Introduction
- 2. Africa in the Context of China's Resource Acquisition Requrements
- 3. The Origins of China's New Africa Policy
- 4. The Role of FOCAC
- 5. China's New Resource Acquistion Business Model
- 6. The Role of Chinese Institutions in the Acquisition of Business Intelligence
- 7. China's Energy Footprint in Africa
- 8. China's Mining Footprint in Africa
- 9. China's Telecommunications Footprint in Africa
- 10. China's Infrastructure Footprint in Africa
- 11. The Role of China's Financial Institutions
- 12. Implications for Japanese Investors
- Annexure I: The Focac Fuc Structure
- Appendix II: The Forum on China-Africa Cooperation
- Annexure III: Ministry of Commerce
- Annexure IV:Profile Chen Yuan and Chi Janxin