When it comes to planning insecurity,

knowledge is important.

Knowledge about who's the biggest.

Who, for example, is the biggest

foreign investor in Afghanistan?

Which country has

the most Internet users?

Which country is

the biggest emitter of carbon gases?

And which country has

the most people in the world?

There is one country that is

all of these… Welcome to China.

China’s growth has meant that it has

expanded its interests in the world.

Chinese projects and companies

now operate on all continents,

but this expansion

has not always gone smoothly.

We have several incidents in Africa,

for example, Nigeria, Kenya,

but also, for example, Zimbabwe,

where Chinese investors were clearly

threatened by political interest groups

but also by armed factions.

Yes, there have been kidnappings,

there have been assassinations,

there were Chinese ships hijacked

or held for ransom.

And not only in Africa

there have been problems.

Even in Pakistan there've

been attacks on Chinese interests.

We have seen contingencies, attacks

on Chinese targets in Balochistan,

in Waziristan,

and even in the Pakistani capital.

So it’s quite serious.

So how is China reacting?

There have been unconfirmed

reports in Africa that there are,

they have

their own private security firms

who may be defending

pipelines or energy installations.

But the investment in Africa helps

developing countries' development.

I’ve heard Jeffrey Sachs say that

China seems to be more interested

in developing Africa’s infrastructure

than the West ever was.

They are building additional railways.

They built railways

in the 1950s and 60s,

but now they are building

roads, railways, football stadiums,

government ministries...

It’s all part of the package.

But some of these benefits

do not come without conditions.

If you look, for example,

at the massive loans

that China is throwing out

at the African continent,

the Chinese are clever in recycling

this money three or even four times.

And it's a loan, it’s not a grant.

When it comes to using these loans,

often they have to stick to Chinese

contractors, with Chinese workers,

and so forth.

So, there are no political,

but economic strings attached.

But sometimes China

seems to have no ulterior motive

in helping African countries,

which have no natural resources.

A lot of observers say that all

Chinese programmes are mainly…

or only for resources,

but the opposite is true.

You know Mali, which is

a country with a lack of resources.

The Chinese help the Mali people

there build up the second bridge

across the Niger river.

We also help the Mali people

build up the anti-malaria centre

and provide medical equipment

and medicines for the local people

to help them to make

free treatment of the disease.

You cannot see

any resources for China

to grab for the Chinese development.

But despite these positive outcomes,

business is business.

China is not an NGO, and if you

look at the views of Chinese experts

but also government officials

on their economic cooperation,

on the one hand they stress,

it’s very important to show

that we still have

this South-South alliance,

but on the other hand

the baseline is still

we have to look

after our own economic interests.

In addition they claim

that rather than a resources grab

Chinese companies are involved

in selling on the open market.

The Chinese companies

do business in Africa.

For example, in Sudan, the Chinese

oil company invests there heavily.

But they sell the oil from Sudan

to all the other markets in the world,

not only return all the oil back

to China for the development. Why?

Because those companies are

market-oriented companies.

They have to make money.

Defending an expanding set

of global Chinese interests

could help China’s army

discover a new role.

Emerging economies like this

discover that

they have interests to protect,

perceived threats to protect,

and a status,

a symbolic status to develop

a strong military or a security force.

Within the military elite

there is a lot of interest

for finding new major tasks

for the People’s Liberation Army.

Defending the borders

continues to be very important,

also maintaining domestic stability,

but still there is a very interesting

quest now for a kind of a new,

as they call it,

historical mission for the PLA.

And non-traditional security threats

certainly play an important role

in that quest for new tasks.

To make

its military more independent

China has moved from buying its

military hardware to making it itself.

Thus far China has purchased most

of its military hardware from Russia.

Two billion US dollars each year.

So it’s quite significant,

but they see it as a very

strategic, long-term objective

to have their own

indigenous, independent

military industrial complex.

You can already see everywhere

that the Chinese are starting to export

their military goods

to other developing countries,

so it’s lucrative for them as well.

China has been accused

of under-reporting

its level of spending on its military.

China’s official

military spending is underrated,

the figures are way too low, but

that’s not only the case with China.

If you look at India or Russia,

you face the same problem.

The Brazilian defence minister a

couple of years ago even went so far

as to say that their defence budget

has to increase by 50 percent.

No one batted an eyelash.

The Chinese say

that the differences come down

to divergent ways

of counting military expenditure.

They always exaggerate

the Chinese military expenses.

In recent years we increased

the amount of military expenses.

But as I know mostly...

...the money is used for the salaries

and the living standard improvement.

That's... China has more

than two million soldiers.

If one official or one common soldier

gets just a little bit more salary

the total will be very big.

The type of hardware

has changed too,

with defensive being joined

by offensive projects.

We see nowadays that China is doing

a lot of research and development

in arms systems

that are not that defensive.

Its most recent generation

of cruise missiles has a huge range.

If we look at its most recent

generation of anti-ship missiles,

ranges until 200 kilometres.

So I think these are all signals

that China is gradually extending

its traditional military range,

and this is only the start.

China may be increasingly making

its own hardware, but is it any good?

I’ve heard military experts,

as I say, indicate, for example,

that the latest Chinese technology,

the G10,

is 1980’s technology basically.

That the carrier

may be a one-shot carrier.

China feels

that far from being a threat

it already helped save

the world economy during the crisis.

China’s holding

of US Government Bonds

accounts for about a third

of the US stimulus package.

The US government

already has a big budget deficit.

It’s needed more money

to do its stimulus package,

to stimulate

the US economic recovery.

From this point of view,

China invests its money in US budget.

It’s for saving the US.

It’s for saving

the world economy as well.

The new approach

of a more powerful globalised China

towards its foreign

insecurity policy raises questions.

Will the frozen conflicts be unfrozen

by its build up of military hardware?

How will it merge

its principle of non-interference

with its need to protect its increasing

number of investments abroad?

Few people have all the answers but

many agree that one thing is clear.

This is a work still under

construction.

In reality it is recognised

that China is more worried

about internal problems and threats

than external ones.

They have been aware

that internal security issues

are the most direct threat,

the highest priority even.

Internal insurgencies, terrorism,

even crowd control.

There are demonstrations,

mass demonstrations

on environmental issues.

So they’ve become familiar with this

concept of non-traditional security.

They watch it very carefully.

I’ve been involved in some of them,

or in the midst of some

of these mass public demonstrations.

Now the most difficult stage arrives,

meaning making

growth more balanced,

making also growth more oriented

towards generating new jobs,

making growth cleaner.

All these challenges still lie ahead

and I think this definitely gives

a lot of reasons for concern in Beijing.