CHINA’S ‘‘SOFT POWER:’’ OVERVIEW AND U.S. POLICY CHALLENGES

We begin this memo with several caveats about the limits on a decisive analysis of the extent and implications of China’s international ‘‘reach’’—its soft power, a phrase we define below.

First, there is little consensus within the U.S. and global China-watching communities on China’s foreign policy goals or on what motivates and informs China’s decisions—either decisions made in general terms or with regard to specific regions or countries. Does China’s international engagement have a pragmatic, overarching strategy, or is it a series of marginally related tactical moves to seek normal economic and political advantages? Is Beijing interested in supplanting the United States as a global power or focused mainly on its own national development? Does the PRC feel strong and confident internationally or weak and uncertain? No one is sure.

Many have written on China’s foreign policy decision-making. Although China’s foreign policymaking has become more regularized in recent years, few claim to be certain about how China’s foreign policy decisions are made, about who makes them, or about what long-term goals Chinese policies seek to attain. Some profess certainty: however, they have not been able to demonstrate that their convictions lead to any sort of consistency in analyzing or predicting China’s foreign policy decisions.

In the aftermath of incidents of Sino-U.S. tension or confrontation—such as the case in 2001 when a Chinese fighter jet collided with a U.S. EP-3 reconnaissance plane, or the case in 2007 when the PRC suddenly denied Hong Kong port visits to a series of U.S. ships—U.S. officials have remained largely in the dark about the PRC’s crisis management processes and about why and how PRC leaders reached their decisions. The number of unknown variables that still animate China’s foreign policy goals and decision-making processes is simply too great. There appears to be no ‘‘magic bullet’’ then—no individual or group with proven answers—that definitively can inform U.S. views or prepare U.S. government and congressional actors on how best to prepare for the challenge China could pose to U.S. global interests.

Relatedly, a study of PRC international influence is hampered by a lack of reliable data on Chinese foreign aid and by lack of transparency on whether and how the PRC makes and implements large, high-profile investment agreements. PRC assistance to other countries comes from multiple government agencies with little or no apparent oversight; it does not appear to be tracked or monitored by one single government entity. Many forms of PRC foreign assistance—loans, debt forgiveness, the building of large public facilities, and trade and investment agreements—do not meet the traditional definition of ‘‘development assistance,’’ which is how most of the world’s donor countries provide aid. Furthermore, PRC assistance is not provided in regularized annual allotments, but appears to follow a funding schedule determined by Beijing’s diplomatic priorities. Beijing reportedly also is reluctant officially to reveal the totals of its foreign assistance for a variety of reasons— including out of fear of domestic objection that Beijing is not spending its money at home rather than abroad. In sum, the extent of PRC foreign assistance to other countries cannot be determined accurately.

Finally, although U.S. Administrations for decades have pursued consistent engagement with China, periodic questions arise about whether the U.S. approach is based on a well-articulated and coherent strategy or is simply an approach of convenience that should be reassessed in the face of China’s rise. Outside the Administration, the U.S. policy debate continues to be characterized by the strident dynamics that arose in the mid-1990s, in which American hard-liners (self-described as the ‘‘Blue Team’’) are pitted against those advising cooperation and engagement with China (pejoratively labeled as the ‘‘Red Team’’ by the opposing group). Thus, there is little agreement about the degree of threat or challenge China poses to the United States.

In the vocal minority are those who view China as a growing military menace with malign intent. These hardliners have been perceived sometimes by others as agitators whose counsel to treat China as a major threat to U.S. interests is designed to justify huge U.S. military budgets and is more likely to bring about conflict with China than to deter it. The view that has been pursued more openly by U.S. Administrations is one that counsels cooperation and engagement with China as the best way to integrate China into the prevailing global system as a ‘‘responsible stakeholder’’— a nation that has ‘‘a responsibility to strengthen the international system that has enabled its success.’’ 

But opponents of this approach typically paint these as the views of ‘‘panda-huggers’’ who, seduced by the potential of the China market, are oblivious to PRC hostile intent, cave in to PRC wishes and demands unnecessarily, and thereby squander U.S. strategic leverage and compromise U.S. interests. The confrontational and highly-charged dynamic between these two polar views continues to make elusive the kind of pragmatic and reasoned policy discourse that could create greater American consensus on how the United States should position itself to meet the challenges China poses.

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A STUDY
PREPARED FOR THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
BY THE
CONGRESSIONAL RESEARCH SERVICE
LIBRARY OF CONGRESS
APRIL 2008
Printed for the use of the Committee on Foreign Relations

CONTENTS
CHINA’S FOREIGN POLICY AND ‘‘SOFT POWER’’
IN SOUTH AMERICA, ASIA, AND AFRICA
Letter of Submittal .................................................................................................. v
Letter of Transmittal ............................................................................................... vii
China’s ‘‘Soft Power:’’ Overview and U.S. Policy Challenges ............................... 1
Definitions of Soft Power ................................................................................. 2
Presumed PRC Foreign Policy Goals .............................................................. 4
Competitive Advantages of PRC ‘‘Soft Power’’ ............................................... 9
Limitations on PRC ‘‘Soft Power’’ .................................................................... 10
Implications for U.S. Interests ........................................................................ 12
Options .............................................................................................................. 13
Latin America and the Caribbean .......................................................................... 16
Overview ............................................................................................................ 16
Diplomacy .......................................................................................................... 16
Economic Ties ................................................................................................... 20
Foreign Assistance ............................................................................................ 26
Implications for U.S. Policy in Latin America and the Caribbean ............... 28
The Southwest Pacific ............................................................................................. 32
Overview ............................................................................................................ 32
Diplomacy .......................................................................................................... 33
Trade and Investment ...................................................................................... 36
Foreign Aid ....................................................................................................... 37
Pacific Views Toward China ............................................................................ 38
Implications for U.S. Policy in the Region ..................................................... 40
Japan and South Korea ........................................................................................... 42
Overview ............................................................................................................ 42
International Trade Flows ............................................................................... 42
Investment, Financial, Aid, and Cultural Flows ........................................... 45
China’s Relations With Japan ......................................................................... 51
China’s Relations With South Korea .............................................................. 54
Regional Trade Arrangements ......................................................................... 58
Implications for U.S. Policy in the Region ..................................................... 63
Central Asia ............................................................................................................. 65
Overview ............................................................................................................ 65
Bilateral and Multilateral Diplomacy ............................................................. 66
Economic Ties ................................................................................................... 71
Foreign Assistance ............................................................................................ 78
Implications for Central Asia .......................................................................... 79
Implications for U.S. Interests ........................................................................ 83
Southeast Asia ......................................................................................................... 88
Overview ............................................................................................................ 88
Diplomacy .......................................................................................................... 89
A Comparison of U.S. and Chinese Economic Relations With ASEAN ....... 91
Foreign Aid ....................................................................................................... 97
U.S. Policy Implications ................................................................................... 101
Sub-Saharan Africa ................................................................................................. 105
Overview ............................................................................................................ 105
China’s Current Africa Policy .......................................................................... 107
PRC ‘‘Aid’’ and Trade Finance in Africa ......................................................... 113
China-Africa Trade and Investment ............................................................... 119
Sino-African Engagement: Implications ......................................................... 125

DEFINITIONS OF SOFT POWER

As requested, this study focuses on China’s ‘‘soft power’’ projection in the specified regions. The term ‘‘soft power’’ originally was conceived in 1990 by Harvard Professor Joseph S. Nye, Jr.. Nye argued that the United States had reserves of power and influence that were separate from ‘‘hard power,’’ or military force projection.

He expanded greatly on this concept in his book, Soft Power: The Means to Success in World Politics—partly, he said, from the frustration of watching ‘‘some policy makers ignore the importance of our soft power and make us all pay the price by unnecessarily squandering it.’’  According to Nye, soft power is crucially important in today’s world politics and is significantly more than just the trappings of American culture: Soft power rests on the ability to shape the preferences of others . . . . [It] is the ability to get what you want through attraction rather than coercion or payments. It arises from the attractiveness of a country’s culture, political ideals, and policies. When our policies are seen as legitimate in the eyes of others, our soft power is enhanced. America has long had a great deal of soft power . . . .

More broadly speaking, the components of soft power also are defined as including international trade, overseas investments, development assistance, diplomatic initiatives, cultural influence, humanitarian aid and disaster relief, education, and travel and tourism.

Although American soft power remains formidable, by some of these measures it is seen to have declined in the 21 century. In absolute terms, some believe this perceived decline is the result of the United States’ own policies and actions. One former U.S. Government official speculates that although America has massive remaining reserves of soft power, they have become a ‘‘non-renewable resource’’ given current U.S. policies. Others point to multiple global survey results on international views of the United States, saying ‘‘the downward trend is unmistakable.’’

As Nye himself puts it:
Anti-Americanism has increased in recent years and the United States’ soft power . . . is in decline as a result . . . . A Eurobarometer poll found that a majority of Europeans believes that Washington has hindered efforts to fight global poverty, protect the environment, and maintain peace. Such attitudes undercut soft power, reducing the ability of the United States to achieve its goals . . . .

Others have attributed the perceived decline in American soft power as relative—largely a comparative decline based on the rise of other powers—in particular the rapid emergence of China as a U.S. ‘‘peer competitor’’ and a growing source of international influence, investment, and political and economic power. China is seen to be trying to project soft power by portraying its own system as an alternative model for economic development, one based on authoritarian governance and elite rule without the restrictions and demands that come with political liberalization. Furthermore, according to this view, ‘‘soft power’’ is ephemeral; the United States has recovered from loss of prestige and influence before (such as occurred with the Vietnam War), and it will again. China’s apparent soft power gains, then, should not be blown out of proportion.

It is clear that China’s foreign policy today has changed fundamentally in the years since Chairman Mao Zedong’s policy of ‘‘self-reliance’’ greatly constrained the country’s foreign contacts and when the country’s foreign policy goals centered on promoting Maoist revolutionary parties around the world. Under reform policies begun in 1978, China in the past 30 years has openly sought and received substantial foreign investment, technology, and expertise; has become an international export powerhouse; has expanded its membership and participation in international organizations; and increasingly has appeared willing to embrace many norms and rules of the global economic system of which the United States is the chief architect and dominant player. Since 2000 in particular, there has been a steady increase in the PRC’s courting of foreign governments, including high-level diplomatic exchanges, trade initiatives, investment agreements, and tourism and cultural understandings.

Having progressed on a steady path in the last three decades on multiple global economic and political endeavors, China’s robust international engagement since 2000 has caught many by surprise and has prompted growing American disagreement and debate over PRC motivations and objectives. The fact that much of this international engagement has expanded while the United States has been preoccupied with its military involvement in Iraq and Afghanistan also is causing a growing degree of American introspection.

Moreover, many fear that China’s growing international economic engagement is going hand-in-hand with expanding political influence.

Although some believe that PRC officials appear more comfortable working with undemocratic or authoritarian governments, PRC outreach also has extended to key U.S. allies or to regions where U.S. dominance to date has been unparalleled and unquestioned, leading some to conclude that Beijing ultimately intends a direct challenge to U.S. global power.

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