Enter the dragon

China's leaders have never been so confident. In their minds, America's economic 'empire' has collapsed, as the Soviet Union did 20 years ago, bringing down with it the western financial system, and leaving only China to lead the world through self-perceived virtue, from behind its Great Wall. At least that is how they see it.

Beijing's hyped 'successful' 2008 Olympics crystallised this perception of a global financial and political tectonic shift. China's leaders watched the grand, choreographed opening ceremony (which only a communist superpower could pull off), which was graced with the presence of then-US president George W. Bush - who epitomised the seemingly condescending western values in front of a celestial dragon. That drove home a point: China, now rich with its massive foreign-exchange reserves, had taken its long-deserved and rightful place.

For China, the collapse of Wall Street has only strengthened its 'Great Wall' outlook, confirming a belief that the global power vortex has shifted. All talk of free-market access and capital flows, rule of law, democracy and human rights have been thrown out.

Then, enter US Secretary of State Hillary Rodham Clinton, with much talk, during her trip to Beijing, about mutually solving the global financial crisis - and silence on human rights. Her hosts were ecstatic. In their eyes, America had finally succumbed to a full kowtow before the celestial emperor. If that sounds exaggerated, remember that China has viewed the world through this prism - one dragon emperor as a vortex of the universe - for 2,000 years.

So, how does this transcend into the political arena? On March 9, National People's Congress chairman Wu Bangguo declared to the NPC that China would never introduce a system of 'multiple parties holding office in rotation', never allow separation of powers between the legislative, executive and judicial branches of government, or allow a legislature made up of lower and upper houses. So, Mr Wu effectively put the lid on any ulterior political aspirations. Western analysts pondered China's juxtaposed economy and politics. President Hu Jintao, meanwhile, suggested more wall building. 'We must build a sturdy Great Wall against separatism and to protect the unity of the motherland,' he said. Does this mean China is overconfident, insecure, or maybe both? With nearly US$2 trillion in foreign-exchange reserves, Beijing's projection of self-confidence is unprecedented. Some officials deny the global crisis can breach China's Great Wall. In a statement from fantasy land, Li Deshui, a former statistics bureau chief, said during the NPC meetings that the Chinese economy would not enter recession. Yet, last month, mainland exports plunged 25.7 per cent from February last year, a much higher figure than expected. The trade surplus also shrank sharply, from US$39.1 billion in January to US$4.84 billion last month. Some analysts wonder if such self-confidence might evolve into political brinkmanship? Chinese boats clashed with a US surveillance vessel off Hainan Island recently, a reminder of the spy plane curtain-opener for the Bush administration's relations with China. Nevertheless, it would be a mistake for panda-bashers to inflame fears that China is on the verge of challenging the US. It is a sign, however, that China's soft power could easily evolve into hard power.

France is a case in point. President Nicolas Sarkozy's wavering over attending the Olympics, and later meeting the Dalai Lama together with other Nobel Peace Prize laureates, were gestures that might be ignored by another nation. But they outraged the dragon. In a recent European diplomatic foray, Premier Wen Jiabao deliberately side-stepped France. Airbus orders have been slashed. Yes, Mr Sarkozy succeeded in irritating other European leaders enough to allow Beijing to believe it could isolate him using commercial leverage. But this should not be a consolation for other European nations, or America. France's role as a punchbag foretells how bigger powers might be pummelled when conditions are ripe, and the dragon is ready to tackle them.

Laurence Brahm is a political economist, author, filmmaker and founder of Shambhala