Erik Prince company to build training centre in China's Xinjiang

(Corrects value of investment to 40 million yuan from 4 million yuan in paragraph 6 of this Jan. 31 story.)

BEIJING (Reuters) - Hong Kong-listed Frontier Services Group (FSG), co-founded by former U.S. military services contractor Erik Prince, has signed a deal to build a training base in China’s far western region of Xinjiang, the company said in a statement.

Xinjiang is an important part of China’s sprawling Belt and Road infrastructure network but the region has faced attacks blamed on members of the Muslim ethnic Uighur minority, to which the government has responded with a security clampdown that has drawn condemnation from rights groups and Western governments.

Company officials could not immediately be reached for comment at offices in Beijing and Hong Kong.

FSG, a security, logistics and insurance provider, signed a deal with the Kashgar Caohu industrial park in southern Xinjiang to build a training centre, FSG said in a Chinese-language statement on its website.

It did not provide details of the project but said a signing ceremony in Beijing on Jan. 11 was attended by officials from Xinjiang’s Tumxuk city and from CITIC Guoan Construction, owned by state-run conglomerate CITIC Group.

FSG will invest 40 million yuan ($6 million) in the centre, which will have the capacity to train 8,000 people a year, state media said in a report.

Prince, deputy chairman of FSG, is a former U.S. Navy SEAL officer and the brother of U.S. Secretary of Education Betsy DeVos.

He founded a U.S. military contractor formerly called Blackwater that drew harsh international scrutiny and faced lawsuits for shootings and other conduct in Iraq. The company now operates as Virginia-based Academi.

FSG told Reuters in 2017 that it planned to set up an office in Xinjiang.

That year, it acquired a 25 percent stake in a security training facility in Beijing, which it said was the largest such school in China and would allow FSG to provide “world-class training courses” to Chinese companies.

Hundreds of thousands of Uighurs and other Muslims have been detained in the security clampdown in Xinjiang.

China has defended the measures as “de-radicalisation” that has prevented violence by providing vocational training to people susceptible to “extremist” thought.

Tumxuk city is run by the Xinjiang Production and Construction Corps, known informally as the “bingtuan”, a Han Chinese-led paramilitary group, originally sent to the region in the 1950s to secure it and to build farms and settlements.

The corps remains influential in much of the resource-rich region’s agriculture and energy sectors, and is a form of parallel state that operates alongside the regional government.

In its post, FSG cited Tumxuk Communist Party boss Li Zhenguo as saying he hoped the project with FSG would help bolster the bingtuan’s presence in southern Xinjiang.

Reporting by Christian Shepherd; Editing by Robert Birsel