China's rise as a global player exposes its 'soft power deficit'

THIS week sees China celebrate the 40th anniversary of the start of Deng Xiaoping's landmark economic reforms, including Tuesday's speech by President Xi Jinping. While the changes have been one of the biggest game-changers in global affairs in the post-war era, their very success raises today not just key opportunities but also challenges for Beijing.

On the success side of the ledger, China's rise to greater prominence has been one of the defining features in recent decades. For instance, IMF data since 2014 has asserted that the Chinese economy is now larger than its US counterpart on a purchasing power parity basis (which makes adjustments for the fact that goods are cheaper in China and other countries relative to the United States).

In so doing, Beijing has recorded an average annual GDP growth rate of around 9.5 per cent in the past 40 years. And this has fostered growth of a middle-income population of 400 million and lifted more than 700 million Chinese out of poverty.

However, the consequences of this remarkable feat have been more than economic and financial. In terms of perceptions, many around the world believe the global political balance of power has swung very significantly.

And this is having important, real-world implications, including feeding into political posturing of some Western politicians on China. Take the example of US President Donald Trump with his sometimes very blunt anti-Beijing rhetoric, and his potential trade war with the Middle Kingdom.

During the 2016 presidential campaign, for instance, he promised "we're going to turn it around. And we have the cards, don't forget it. We're like the piggy bank that (is) being robbed. We have the cards. We have a lot of power over China".

The subsequent trade tensions between Beijing and Washington have potential to severely disrupt what is probably the world's most important economic and political bilateral relationship. While Mr Trump has agreed to hold off for 90 days the planned increase from 10 per cent to 25 per cent in US tariffs on some US$200 billion worth of Chinese goods, sentiment could easily shift again in coming weeks in a hawkish US direction.

The stark change in international perceptions towards China is underlined by Pew Global Research. In October 2018, people in 25 countries overwhelmingly agreed that China plays a more important role in the world today than a decade ago.

Moreover, Pew also found last year that domestic publics in seven of the 10 EU nations surveyed asserted that China is the world's "leading economic power". Moreover, in long-time US ally in Asia-Pacific Australia, the population there put China ahead on this question by a two-to-one margin.

Thus, 58 per cent of Australians in 2017 believed Beijing is the "world's leading economic power" which represents a rise of 18 percentage points (from 40 per cent) since 2008 alone. Comparable data for other countries includes the United Kingdom which has seen a rise from 29 per cent to 46 per cent over the same period.

Much of the reason for these changed perceptions of China's strength stems from the aftermath of the 2008-09 financial crisis. While much of the developed world subsequently recovered, at a sometimes slow pace, from the worst economic downturn for a generation, China enjoyed mostly strong growth.

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While welcomed by many in China who understandably like recognition of the country's growing might, this opinion shift is causing some headaches for Beijing. For, as Mr Trump's often ill-informed rhetoric shows, it has exposed the country to greater foreign scrutiny and fed into perceptions, seized upon by politicians like the US president, tapping into angst about China's rise.

What this underlines is that China's growing prominence is not without challenges for Beijing. This is especially given that the country's grand strategy had long been premised on a gradual, peaceful transition to power during which it will grow stronger while keeping a low profile.

Deng himself, for instance, asserted that consolidating China's socialism would take dozens of generations and that the nation should behave humbly during this time. Hence, one of his trademark comments was that it would be best to "hide your edge and nurture your strength".

Yet, Beijing has increasingly adopted a higher profile, more assertive foreign policy in recent years. The significantly brighter spotlight this has put on the country has, unfortunately, 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 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 2018, for instance, only three of the 25 countries surveyed asserted that they prefer a world order where China was the leading power compared to the United States.

Moreover, in 2017, Pew found across the populace surveyed in the EU (10 nations) and Asia-Pacific (seven countries), there was overall net negative opinions about China. This was 44 per cent unfavourable to 43 per cent favourable in the EU, versus 41 per cent unfavourable and 34 per cent favourable in the Asia-Pacific.

In the United States too, China also has had a net unfavourability rating in 2017, according to Pew. Mr Trump is well aware of this sentiment, and also the fact that US Republican voters tend to have lower overall favourability than Democrat counterparts towards Beijing.

Especially if 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, some measures might include utilising 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 actions.

This agenda may pose significant challenges for Beijing 40 years on from Deng's reforms. However, unless it is tackled, China's soft power deficit would only grow bigger in 2019 and beyond.