/ 29 June 2017

China on charm offensive at World Economic Forum

(Dale de la Rey/AFP)
(Dale de la Rey/AFP)

The World Economic Forum (WEF) in the Chinese city of Dalian this week for the so-called Summer Davos comes at a time when China is assuming a greater global profile, including on issues such as climate change and trade, and as United States President Donald Trump intends to withdraw from a series of international treaty commitments in these areas.

This week’s forum is not the first time this year that China has used the WEF to position itself positively on the world stage. In January, Xi Jinping became the first Chinese president to give a speech at Davos in Switzerland, making an impassioned defence of economic globalisation in the face of Trump’s protectionist rhetoric.

China has been a big beneficiary of globalisation, with International Monetary Fund data since 2014 showing that the Chinese economy is now larger than the US on a purchasing power parity basis. This formula makes adjustments for the fact that goods are cheaper in the country relative to the US.

But the consequences of China’s strong economic growth have been more than financial. In terms of perceptions, many believe the global economic and political balance of power has swung significantly, and this has been reinforced by major Chinese trade and diplomatic forays such as the “One Belt, One Road” initiative.

This shift in perceptions is having important, real-world implications including feeding into Trump’s posturing on China and occasionally blunt rhetoric on issues from international trade to alleged currency manipulation. Trump has toned down his rhetoric towards Beijing in recent weeks.

Yet earlier this year, and during the 2016 election campaign, he questioned whether “China asked us if it was okay to devalue their currency making it harder for our companies to compete, heavily taxing our products going into their country”. Separately, he asserted the US is “like the piggy bank that [has been] robbed” by Beijing. One of Trump’s many threats has been to impose punitive tariffs on goods made in China.

The stark change in international perceptions towards China is underlined by data from Pew Global Research. This shows, for instance, that 52% of Australians in 2016 believed Beijing is now the “world’s leading economic power”, which represents a rise of 12 percentage points (from 40%) since 2008 alone. Comparable data for other countries includes Japan (a rise from 19% in 2008 to 24% in 2016), the United Kingdom (a rise from 29% to 35% over the same period), and the US (26% to 34%).

One big reason for these changed perceptions of China’s strength stems from the aftermath of the 2008-2009 financial crisis. Although much of the developed world subsequently recovered from the worst economic downturn for a generation, China has enjoyed mostly robust growth.

The high point of China’s perceived economic strength — prior to the country’s most recent financial “stickier patch” since 2015 — was in 2013. Then a wide variety of people in countries such as Australia (63%), Germany (59%), Canada (56%), Spain (56%), Czech Republic (55%), France (53%) and the United Kingdom (53%) judged China to be the world’s leading economic power. Others, including the US (44%), also scored China more highly than in either 2008 or 2016.

Although welcomed by many in China, this opinion shift is not without headaches for Beijing. It has exposed the country to greater foreign scrutiny and fed into perceptions, seized upon by populist politicians such as the US president, tapping into angst about China’s rise.

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

As international perceptions of the country’s power have changed, its global acceptability has weakened in some key countries, as underlined in Pew’s data in 2016. In only two of 15 nations surveyed, Greece and Australia, did half or more of those polled state a favourable opinion toward China.

A majority in multiple European countries — including France, Germany, Spain, Italy and Sweden — view China negatively. In the US, only 37% of people were positive about China, compared with 55% with a negative view. Trump, as with other populist politicians in the West, are well aware of this sentiment, and that US Republicans tend to be less favourable than Democrats towards the country.

Moreover, the most recent data underlines that positive perceptions of China have declined in more than half of the countries where Pew’s longitudinal data is available. This includes France (drop of 17 percentage points since 2015), Spain (13 points), India (10 points), Italy (eight points), the United Kingdom eight points) and Germany (six points).

If this critical scrutiny intensifies, Beijing must find better ways of tackling 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 co-operation projects. Surveys underline that, internationally, many people admire China’s strength in science and technology.

Beijing will also secure benefits by better addressing foreign concerns about Beijing’s intentions as a rising power, as Xi and other Chinese leaders are now doing. As with climate change diplomacy, it can now intensify efforts to be seen as a responsible, peaceful global stakeholder and match this rhetoric with actions.

Andrew Hammond is an associate at the Centre for International Affairs, Diplomacy and Strategy at the London School of Economics