China's Soft Diplomacy Hardens Up

China's Soft Diplomacy Hardens Up

By Jon-Michail

Chinese leaders believe that China’s place in the world has arrived, according to influential Chinese policy analyst Wang Jisi.  The US is seen as ‘neither awesome or trustworthy, and its example to the world and admonitions to China should therefore be much discounted.’ He believes that if the US continues with its present economic and domestic political system, China will emerge as the winner over the long term.

Wang is in a unique position to make such predictions. Influence and access to senior policy makers in both Washington and Beijing gives him an insider’s view of the thinking of both countries. He has co-authored a monograph with Kenneth Lieberthal, the director of the John L Thornton Centre for China Studies at Brookings, and a former member of the National Security Council, titled Addressing US-China Strategic Distrust.  It has just been  published by the Brookings Institution in Washington and the Institute for International and Strategic Studies at Peking University.

China believes that Washington is trying to undermine and even disestablish the economic and military growth that would make China the world’s most powerful country. Both countries believe that their opposition’s policies are dangerous and that they threaten the policies of the other. In the Chinese leadership’s opinion, the US is ‘on the wrong side of history’ and that in a matter of years, China will replace the US as the strongest economy in the world.

At the Boao Forum in April 2012, which hosted business and political leaders from around the world, Jin Liquin, head of the supervisory board of China Investment Corp, stated that Chinese companies should focus on investing in target countries or face growing rejection. CIC manages more than $400 million of China’s foreign reserves and, leading the growing interest in offshore assets, has purchased almost 10% of the investment banks Morgan Stanley and the Blackstone Group.

Now that the European debt crisis has re-emerged, Chinese business leaders and economists are eyeing up underpriced assets. Volvo has already been purchased by Zhejiang Ghely and German pump maker Putzmeister by Sany Heavy Industry. Sany Chairman Liang Wengen says Chinese companies must overcome their fear of sudden innovative change rather than the incremental changes they have long been used to. Jin Liquin agrees, saying that Chinese companies must be careful not to scare foreign communities as they increasingly looked for foreign investments and outlined plans for global growth. ‘They should concentrate on the benefits,’ Jin stated.

In a joint conclusion to their monograph, Wang and Lieberthal state the level of strategic distrust between China and the US has become so corrosive that if not corrected the countries risk becoming open antagonists. Looking at the future, we might hope that perhaps business and economic leaders will pave the way towards a better understanding between the two powers and create win-win opportunities for all. However in the current political and economic environment this seems highly unlikely to happen, unless there is a shift in attitude from both sides.

Check out more on this diplomatic posturing…

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