China Government Funds $100 Million South American Security / Surveillance Project

By: Brian Karas, Published on Dec 27, 2016

Chinese manufacturers stand to benefit from new funding that the Chinese government is giving to a South American country for a $100+ million security / surveillance project.

In this note, we examine the deal, its details and the impact this tactic will have on the video surveillance industry. 

Government Project Bolivia

China's government official newspaper touted the deal with Bolivia: "Chinese technology to help Bolivia improve public security system [link no longer available]"

The $105 million loan, which was touted as 'unconditional' will allow a central command center to be built in the capital city of La Paz, a deployment of 1,800 cameras, and then additional video systems in 6 other provinces. Drones, digital radios, busses outfitted for police command, and other security elements are all planned.

China's Loan In Context

Bolivia has ~11 million people, about the same as Georgia or Ohio, so US readers can imagine what ~$100 million could do for such states. A proportional loan to the US or Europe would be over $3 billion dollars.

Axis did less than $400 million in all of the Americas in 2015, China is loaning almost 1/4 of that to a single relatively small country with one of the smallest GDPs in the region.

$240M Loan To Ecuador

In 2012 China loaned Ecuador $240M for a similar project. The success of the project in Ecuador was cited by Bolivia's interior minister as "encouragement" for Bolivia's safe city project. 

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Win For Chinese Manufacturers

Boliva's President stated "We value China's presence in many aspects. China's presence offers cooperation without conditions", but there will certainly be conditions, as China is making these loans to as a way to support their own economy through increased sales of Chinese products. 

Chinese technology will be used, according to the China's government report, so it is likely a good opportunity for China's largest players including Hikvision, Dahua, Huawei and Uniview.

As the Ecuador project influenced Bolivia, the Bolivian project will likely influence surrounding countries to either seek similar loans from China, or at the very least use similar Chinese equipment, following a template of what Bolivia and Ecuador say has worked for them.

Western Manufacturers Lose

Western manufacturers are not likely to see any of this money. Not only does this make it near impossible for them to compete in government/municipal projects, it will likely handicap their ability to win local businesses as well, as those businesses will be influenced by what the local government is using, especially if the systems will be tied together in any way.

China Expansion Policy

This is not accident or exception for China's government. China's involvement in Ecuador and Boliva is consistent with the "One Belt, One Road" initiative, aimed at taking a larger role in global affairs, and keeping China's manufacturing busy and growing.

To the extent that China's government continues with such moves in the video surveillance market would create even further challenges for the rest of the industry.

2 reports cite this report:

Chinese Government Builds Far-Reaching, Allegedly Corrupt, Surveillance System in Ecuador on Mar 13, 2018
Thousands of Chinese security cameras, including many made by Huawei, are watching Ecuadorians around the clock thanks to an integrated emergency...
Huawei Gives France Free City Surveillance on Feb 16, 2017
China is using its financial resources again, this time in France, just a month after the Chinese government funded a $100 million security /...
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