Monday, June 3, 2013

Rising China, Declining West and Changing Softpower Balances - China Expands in the Commercial World

<<Work in Progress>>

Growing economic strength, leaves China as one of the few entities flush with funds in these hard times.  Funds have become so precious after the 2008 Great Recession which for Southern Europe is very nearly a Depression. Governments have had to inject massive amounts of liquidity by printing cash to make up for this lack of liquidity. This was done through Quantitative Easing in the US. QE 1,2 and now 3 which injects close to $80-100bn in the US economy every month.

The powerful West has been among those thirsting for funds. In the current context, the enhanced value of their accumulated funds, leaves the Chinese in a very powerful bargaining position. Their funds are sought after all across the world. However even the Chinese people, are truly invading all corners of the Earth. From running Greece's largest port terminal to setting up prpjects to open up remote Greenland's huge resources. From  the biggest Chinese engineering project in Africa - the Merowe Dam on the Nile in Sudan, to the  $2.3 billion Coca Codo Sinclair Dam in Ecuador, China is setting up 200 dams across various nations. Large numbers of Chinese personnel are transiting all across the globe implementing infrastructure projects. But along with that they are learning about the world, influencing people and communicating with them, but also changing it. For example the textile market in Egypt is dominated by poor Chinese migrants! It is said that by next year more than half a million Chinese will be working overseas on Chinese infrastructure projects . Loan Funds, personnel, infrastructure and natural resource projects typify the Chinese commercial invasion all across the globe. China is delivering services sought after across the entire world. Can one say that because of the Chinese entrepreneurial spirit  the foundations of a New Chinese Tributary system are automatically falling into place - without really aiming for it. And that this tributary system is more commercial at this point than civilizational and cultural. How the British came to India as spirited traders with far greater latent capabilities. And then over time they followed it up by setting up the cultural hierarchies.

China's zooming commercial clout can be best summarized using the following statistics. In 2006, US was the largest trading partner of 127 countries while China was the largest trading partner only to 70 countries. By 2012,   China has become the largest trading partner to 127 countries, while the US is only to 76. A stunning reversal of statistics! And that too achieved in such a remarkably short period of time. This can be seen as a tribute to the flawless economic management of the Hu-Wen team who have quietly but intensely focused on getting China to the safe harbor of "Largest Economy" status. An economic power level which safeguards China - ensuring that it wouldn't arm-twisted into submission to the West. An economic power level which is China's insurance policy against a repeat of 1991. Thanks to this staggeringly fast economic development, China's has been able to build up its Comprehensive National Power in record time. 

This Hard Economic Power is now beginning to build a Soft power persona as well. The Chinese achievements are beginning to be "seen" as stupendous, miraculous, stunning. This boosts the credibility of the Chinese economic model and governance system at a time when the Western economic model is faltering and the governance system is coming under deep attacks from the mainstream - not just the leftists and the Occupy movement. The western middle class discourse is full of anger, bitterness and rebellion at the monopolistic plutocracy - Big Oil, Big Pharma, Big Banks, Big Coal and Power, etc. which corners almost all profits. Through their tight control of the economic decision-making process this 0.01% makes a mockery of the much-vaunted Liberal Democratic model.  The Chinese economic model and governance system is increasingly alluring to the rest of the world. Without so much as trying.  There is growing evidence that even without any control over the levers of global media, Chinese Soft Power seems to be on the Up. What is astonishing is that this is occurring despite a continuous barrage of negative reports covering street protests, food pollution, medical epidemics and bad air quality in Beijing. Almost a deliberate negative feed  being generated for the global media by a brat-pack of Western journalists whose main aim seems to disparage, mock and vilify the Chinese system. 

This seems to be done with the intention of deligitimizing the Chinese system domestically.  But that is only part of the story. A bigger aim seems to be deligitimize the Chinese system globally. Joseph Nye claims that China is doing very poorly in the competition for Softpower (Click here for Nye's article). I refute this and claim that the US is clearly worked up about the threat of  Chinese soft power. China's economic success is viewed not just as an Economic Threat but more than that it is being perceived to be reaching the dangerous levels of an Alternative Successful Model. The Chinese soft power threat is being countered but not through power games like alliance building and sanctions. The perception of a an alternative model has to be challenged not militarily but in the perceptual domain on the battlefields of Legitimacy. And the intention is to prevent a rising global following for China. 

Nye has disaggregated Soft Power into three broad categories - culture, political values (ideologies) and policies. I would like to recast these into 2 relevant categories: firstly, Cultural-Civilizational; the second and third categories can be bundled into a Ideology-Governance category. To make the point of global Chinese soft power threat, let us look at the US-China soft power in the context of these categories. First, Cultural Soft Power i.e. soft power of a culture/ civilization among the societies of the world. Here clearly the US is an outstanding and unrivaled leader. Second, Ideological-Governance Soft Power. While both US and China adhere to the Capitalist model there is much that separates them. The US follows a Liberal Market-led version of Capitalism as against the State-led regulated-market Capitalism of China. This relatively small difference in Ideology explodes into a major difference at the Policy and Governance level. There is a greater dependence on State policies which are being constantly evaluated and rectified. The better Governance model carries tremendous appeal for all the backward and developing countries interested in growing out of their poverty and backwardness. 

The superior governance model which the world looks up to, admires and pursues becomes a tremendous source of Soft power. As it is based on the Governance system, it can be termed as a Governance Model Soft Power. This is Soft power based not in a Culture or even in an Ideology but at the National-level. At the Governance and policy set-up of a nation. The delicious irony here is that China while being a profound civilization seems to be wielding little cultural soft power (Nye's point), while the US constituted primarily as a Nation has been leading in cultural-civilizational soft power - a representative of the West. As a nation China has done remarkably well over the last 35 years, primarily because it deviated in crucial respects not just from the Western model but also from the West-led developmental model imposed on the developing world. This new model evolved by China is turning out to be an attractive alternative model for the rest of the World. In National Soft Power it seems to be significantly outperforming the US model. So I reject Nye's thesis that China has no worthwile soft power offering on the table. He is viewing the situation only in terms of one of his own softpower categories - cultural softpower. Chinese Governance model on the other hand is the hottest talk across the global Governance-sphere. China is figuring prominently in developmental considerations of African and Latin American governments.

But China as a governance model is not just attractive to the governments and the people of the Rest of the world.  In the context of a disillusioned American public the effects of Chinese "National" Soft Power would surely be knocking at American doors if they are not already doing so. The danger is not just of losing sway over the rest of the world but of losing control over one's own abused and exploited public. A very important goal seems to be to deligitimize the Chinese system as an alternative model in the eyes of the American public. To prevent the increasing disenchantment with the American system turning into a full-blown revulsion and rebellion against the American  system. A trend which could be accentuated by the example of a currently successful Chinese  model. A State-led capitalist model where the size of Big Business has been limited (uptil now) to ensure that Business does not dictate Policy to the State and a State which is free from such interventions. <<working>>

--------------<<work in progress>>
So can one not say that Soft Power derives mainly from Hard Power. Isn't that what Soft Power is? Nothing really substantial on its own. It is perhaps just the glamorous qualities associated with the Powerful. Hard power cannot be viewed directly by the rest of the world. The less powerful need to adjust to Hard Power which is unavoidable and up there. So the rest of the world has to view Hard Power through the illusion of Soft Power in order to make life more livable. To make this world appear the best of all worlds. So stable, even and non-arbitrary Hard Power generates its own soft power.  
All these details and more can be referred to in an article written in New York Times "China’s Economic Empire" by Heriberto Araujo and Juan Pablo Cardenal on June 1, 2013.
Click here to read.

Jeffrey Wassertrom critiques the ideas of Araujo and Cardenal in a Review of their book - China's Silent Army - The Pioneers, Traders, Fixers who are Remaking the World in Beijing's Image
Click here to read.

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