China’s soft power gap

In my Senate testimony on sovereign wealth funds, I wrote the following: 

Looking at the long term, sovereign wealth funds are one component of an alternative development path, suggests a possible rival to liberal free-market democracy.  In state-led development societies, governments could use sovereign wealth funds, state-owned enterprises and banks, national oil companies, extensive regulation, and other measures to accelerate economic development, buy off dissent and promote technology transfer.  If this model proves sustainable over the long run – and this is a big if – it could emerge as a viable challenger to the liberal democratic path taken by the advanced industrialized states.  More countries might think of sovereign wealth funds as a signal of being a “successful” country.  One could then envision the proliferation of such funds – even in situations in which there is no economic rationale for its creation.  This would have corrosive effects on America’s soft power.  It would be an open question whether the rest of the world would look at the democratic development model as one to emulate.  Crudely put, far fewer countries would want what America wants.   

The New York Times has some stories today suggesting that we’re already witnessing the first part of this argument — but not the second.  Edward Wong reports on the growing Chinese assertiveness about their economic model:

Senior Chinese officials are publicly and loudly rebuking the Americans on their handling of the economy and defending their own more assertive style of regulation. Chinese officials seem to be galled by the apparent hypocrisy of Americans telling them what to do while the American economy is at best stagnant. China, on the other hand, has maintained its feverish growth. Some officials are promoting a Chinese style of economic management that they suggest serves developing countries better than the American model, in much the same way they argue that they are in no hurry to copy American-style multiparty democracy. In the last six weeks alone, a senior banking regulator blamed Washington’s “warped conception” of market regulation for the subprime mortgage crisis that is rattling the world economy; the Chinese envoy to the World Trade Organization called on the United States to halt the dollar’s unchecked depreciation before the slide further worsens soaring oil and food prices; and Chinese agencies denounced a federal committee charged with vetting foreign investments in the United States, saying the Americans were showing “hostility” and a “discriminatory attitude,” not least toward the Chinese. All this reflects a brash new sense of self-confidence on the part of the Chinese. China seems to feel unusually bold before the Summer Olympics, seen here as a curtain raiser for the nation’s ascent to pre-eminence in the world. The devastating earthquake last month helped by turning world sympathy toward China and dampening criticism of its handling of Tibet.

 The Times also references a report by the Chicago Council on Global Affairs, however, that suggests Chinese soft power still lags far behind its hard power capabilities: 

China, just months before it is set to take the world’s center stage during the 2008 Summer Olympics, still ranks below the United States as a multifaceted power in the opinion of its Asian neighbors. The report, which is based on public opinion survey in five East and Southeast Asian countries and the United States, reveals that perceptions of China’s soft power – the ability to wield influence by indirect, non-military means – generally trail those of the United States and Japan. These perceptions persist despite China’s strong economic relationships in Asia, and around the world, and its consistent and concerted efforts to leverage the Olympic Games to bolster its public image.

Click here to read the full report.  From the executive summary: 

While other polls have detected declining U.S. global influence, the Chicago Council/EAI survey finds that in Asia, the United States is still highly regarded in all five of the key areas of soft power addressed in this survey: economics, culture, human capital, diplomacy, and politics. Whether this influence is a product of U.S. foreign policy or exists in spite of it, it is clear that the United States has a very strong foundation on which to build future policy in the region.

   

My hunch is that if the survey were broadened beyond the Pacific Rim, Chinese soft power would be inversely correlated with a country’s distance from China. 

The 64,000 dollar renminbi questions are twofold:

1. Will Chinese power continue to grow at current rates?  It’s easy to extrapolate from current trends, but it is not always so;
2. Will Chinese soft power eventually catch up to Chinese hard power – or will the natural reaction in the region be to balance rather than bandwagon? 

I trust my readers to weigh in.