China must boost its soft power to balance economic brawn

Andrew Hammond says Trump’s trade salvoes against China find support in a political base that is deeply suspicious of the country. While China is now perceived as an economic powerhouse, it must do more to burnish international perceptions of its rise 

PUBLISHED : Tuesday, 03 April, 2018, 2:25pm
UPDATED : Tuesday, 03 April, 2018, 10:31pm

Spooking financial markets, China on Monday implemented retaliatory tariffs of up to 25 per cent on around US$3 billion of food goods. This move follows the imposition last month by US President Donald Trump’s team of some US$60 billion worth of US tariffs on Chinese goods in what could, yet, turn into a full-blown trade war. 

Trump’s rationale for imposing the tariffs is his belief that Beijing is employing a range of unfair practices, including stealing US intellectual property. He has repeatedly criticised China’s large trade surplus with the United States which was around US$375 billion last year. 

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The Trump team’s targeting of China in this specific way reflects not just the personal animus that some administration officials appear to have towards the country. It also reflects wider shifts in the global economic and political landscape, with China’s rise one of the defining features of this period. 

The significantly brighter spotlight on the country, especially since 2008, has exposed a ‘soft power deficit’ which is complicating its rise to power

On the financial front, International Monetary Fund data since 2014 shows that the Chinese economy is now larger than the US’ on a purchasing power parity basis, which makes adjustments for the fact that goods are cheaper in China and other countries relative to the US. However, the consequences of the country’s generally strong growth since 2001 have been more than economic.

In terms of perceptions, many believe the global economic and political balance of power has swung significantly. This feeds into the political posturing of some US politicians on China. During the 2016 US presidential campaign, Trump compared the US to “the piggy bank that’s being robbed” and promised to turn the situation around. He has long threatened to impose punitive tariffs on Chinese goods, a move that Beijing has always said it would oppose, given that its WTO membership prohibits other members from unilaterally raising such tariffs above levels they have committed to maintain. 

The stark change in some international perceptions towards China is underlined by Pew Global Research. In 2017, people surveyed in seven of the 10 European Union nations named China as the world’s “leading economic power”. Moreover, in Australia, a long-time US ally in the Asia-Pacific, people placed China ahead of the US by a two-to-one margin, with 58 per cent of Australians believing Beijing is the “world’s leading economic power”.

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The reason for these changed perceptions of China’s strength stems from the aftermath of the 2008-09 global financial crisis. While much of the developed world recovered at a sometimes slow pace, China enjoyed mostly strong growth.

Although this opinion shift has been welcomed by many in China, it is not without headaches for Beijing. For, as Trump’s sometimes misinformed rhetoric shows, it has exposed the country to greater foreign scrutiny and fed into angst about China’s rise.

What this underlines is that China’s growing prominence poses challenges for Beijing. The country’s grand strategy has been premised on a gradual, peaceful transition to power during which it would grow stronger while keeping a low profile. 

The significantly brighter spotlight on the country, especially since 2008, has exposed a “soft power deficit” which is complicating its rise. Soft power, which rests upon the international attractiveness of a country’s foreign policy, political values and culture, is recognised by Beijing as a key political commodity, but one that it has had limited success in cultivating to date. 

As international perceptions of the country’s power have changed, its global favourability has shown weakness in some key countries and continents, as underlined in Pew’s data in 2017. For instance, the populaces of the 10 EU and seven Asia-Pacific countries surveyed expressed overall negative opinions about China – 44 per cent unfavourable to 43 per cent favourable in the EU, and 41 per cent unfavourable and 34 per cent favourable in the Asia-Pacific.

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Moreover, in the US, China also had a net unfavourable rating in 2017, according to Pew. Trump is well aware of this sentiment, and also the fact that US Republican voters tend to see China less favourably than do Democrats. 

As critical scrutiny intensifies, Beijing must find better ways to tackle this soft-power deficit, including enhanced international public diplomacy to win more foreign “hearts and minds”. At a symbolic level, measures might include using the country’s growing capabilities in space travel for high-profile international cooperation projects. Surveys underline that many around the world admire China’s strength in science and technology.

Beijing should also restart a process of addressing foreign concern about its intentions as a rising power. Here, it could intensify efforts to be seen as a responsible, peaceful global stakeholder, and match this rhetoric with action. 

This agenda may pose significant challenges for Beijing. However, unless it is tackled, China’s soft power deficit may only grow bigger in 2018 and beyond.

Andrew Hammond is an associate at LSE IDEAS at the London School of Economics