History repeats? Why Chinese companies are establishing private armies

China appears to be going back to its old ways. Its companies are reportedly setting up volunteer armies, something which was more common in the 1970s. Several of the country’s state-owned enterprises and a private firm have established in-house fighting forces over the last year.

Such private military units were a legacy of the Mao Zedong era , according to a report in Financial Times (FT). But why are they back? We take a look.

What do we know about China’s private armies?

The private units are known as the People’s Armed Forces (PAF). They are made up of civilians who continue their regular jobs and act as a reserve force to China’s military, the largest in the world.

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The People’s Armed Forces are expected to be available for missions like support during wartime, operations during national disasters and helping maintain social order, according to a report by CNN. Another report by  FT says that these private armies carry out civil defence activities and contribute to military recruitment, promotion and training.

However, members of these forces do not operate outside of China as of now. They are a lot like America’s National Guard, a state-based force which serves as a private combat reserve of the US army.

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Since last year, there has been a rise in China’s private militias. In October 2023, the Chinese defence ministry confirmed the push to include these units in state-owned enterprises (SOEs).

An FT analysis of company announcements and state media reports of 2023 shows that dozens of Chinese state-owned firms have set up new departments of the People’s Armed Forces. At least 16 big companies, including a privately-owned dairy giant, have volunteer armies today, reports CNN.

While most private forces are set up by SOEs, in December, Yili Group, became the first private company to set up its own unit. Among the world’s top dairy producers, the firm is not controlled by the state but the local government in Hohhot, the city where it is based, has an 8.5 per cent stake in it.

Yili’s private army unit is under the management of the PLA garrison in Inner Mongolia and the Communist Party committee of the regional government, reports CNN. The group was set up to build a national defence force based at Yili, which can “serve in peacetime, cope with emergencies, and respond in wartime”, said Huang Zhiqiang, executive vice-chairman of the Inner Mongolia Autonomous Region.

Why are Chinese companies setting up these forces?

As China’s economy continues to slow, there is a growing social discontentment among its public. There is also a concern about a conflict abroad as tensions with Taiwan and the United States rise.

Analysts say that the establishment of these corporate forces highlights Beijing’s worries over the issues. It is also seen as part of Chinese president Xi Jinping’s efforts to tighten the Communist Party’s grip over society after the pandemic.

The draconian COVID-19-related restrictions were met with protests and public anger , which is uncommon in the Communist nation. The demonstrations have only grown since as China faces a property downturn and struggles with deflation, youth unemployment and corporate default.

According to data from the China Labour Bulletin, a Hong Kong-based non-profit that monitors workers’ protests, labour strikes have risen to 1,794 in 2023, more than double since the 830 recorded the year before.

Neil Thomas, a fellow for Chinese politics at Asia Society Policy Institute’s Center for China Analysis, told CNN, “The return of corporate militias reflects Xi’s rising focus on the need to better integrate economic development with national security as the country faces a more difficult future of slower growth and rising geopolitical competition.”

According to him, the private armies could help the Communist Party curb protests and employee strikes more effectively.

Grant Newsham, a retired US marine colonel who also worked as a US diplomat in both East and South Asia, said that the private armies are part of Xi Jinping’s efforts to consolidate and tighten control since he took power. “That control is ultimately dependent on potential or actual use of violence and intimidation… Having these armed force units in SOEs expands and tightens control, and the psychological threat of violence,” he told Voice of America (VoA).

Experts believe that these units will focus on internal security and are not being mobilised to take on foreign adversaries.

“The activation of these PAFD [People’s Armed Forces Department] units is a symptom of the leadership’s concern about the domestic social stability situation,” Timothy Heath, senior international defence researcher at the Rand Corporation think-tank was quoted as by FT. “Because it’s happening in so many places all at once, this is almost certainly being directed from the top down.”

He said that these private armies could play a role in domestic security, acting as a link between companies, society and security forces. It would also promote patriotism and help to monitor compliance with directives of the Chinese Communist Party, he said.

What is China saying?

Wu Qian, a Chinese defence ministry spokesperson, said in October 2023, that the effort to raise PAFDs was part of China’s whole-nation approach to national defence and that the militias are available for everything from a large-scale mobilisation to the response to a natural disaster.

In a statement carried by China’s state news agency Xinhua, he said that establishing corporate brigades in state-owned enterprises was required to “fulfil national defence obligations and strengthen national defence construction”. “People’s Armed Force units within state-owned enterprises is a component of the national defence system, it is the party’s armed work department within the enterprises, as well as the government’s recruitment arm within the enterprises,” he said.

What did private armies do in the past?

People’s Armed Forces were linked with the recruitment efforts of the People’s Liberation Army at the county and village level during the time of Mao.

According to Cheng Xiaonong, a Chinese-American social scientist, and Wan Runnan, leading Chinese human rights, the armed forces groups helped the Communist Party to establish its footing in both rural and urban areas after the party gained power in 1949, reports VoA. They cracked down on anti-communist rebellions and made sure everyone toed the party line.

Cheng told VOA that sometimes these groups used sticks, guns and other tools against villagers and factory workers, which could still be done.

With inputs from agencies