Financial crisis has transformed China’s reputation as a global power


September 2008, the month that Lehman Brothers went bust, was the time which many of us realized we were in the midst of an international financial crisis. As dazed workers clutching cardboard boxes streamed out of offices in Wall Street and other financial centers, regulators and politicians rushed to stem the damage of a situation some seemed to barely understand.

Five years on, the dust is still settling but it is clear that the consequences have been more than financial. In terms of perceptions, many people believe the economic balance of power has swung sharply toward China.

While welcomed by many in the country, this opinion shift is causing headaches for Beijing. It has exposed the country to greater foreign scrutiny for which it has been ill-prepared. This has exposed a growing soft power deficit which is complicating China’s rise to power.

The fact that China is increasingly seen as leading the world, economically, is borne out by Pew Global’s research. Of 20 countries surveyed in both 2008 and 2013, the median percentage asserting China as the “world’s leading economic power” increased from 20% to 34%. At the same time, the figure for the United States has fallen from 47% to 41%.

It is generally the most economically developed countries that perceive China on top. As of 2013, a majority of the public in Australia (61% compared to 40% in 2008), Germany (59% compared to 30% in 2008), Spain (56% compared to 24% in 2008), Britain (53% compared to 29% in 2008), and France (53% compared to 31% in 2008) see China as the world’s leading economic power.

Interestingly, more Americans also perceive China (44%) as the world’s leading economic power rather than their own country (39%). A majority in Canada (56%) supports that view.

This trend is evident despite the fact that China, on current trajectories, is unlikely to overtake the United States as the largest economy in the world for a decade or more, and significant uncertainties still surround its future development. This underlines how international sentiment can "overshoot" facts on the ground, and probably reflects public perception in developed economies that China has become a much greater commercial rival since 2008.

In much of the rest of the world (Africa, Asia, Latin America and the Middle East), the United States is generally still regarded as the world’s leading economic power. However, that margin has been falling since the financial crisis, and more people in these regions now believe China will eventually overtake the United States as the “world’s leading superpower.”

Of course, many Chinese welcome recognition of the country’s growing might. However, it is rightly seen as a significant challenge too by Beijing.

China’s grand strategy is premised on a gradual, peaceful transition to power (“harmonious society”) during which it will grow stronger while keeping low profile. The brighter spotlight on the country, since 2008, has thus been unanticipated, and unplanned for.

And, it is this which has fueled China’s’s soft power deficit. Soft power, which rests upon the international attractiveness of a country’s foreign policy, political values and culture, is recognized by Beijing as a key political commodity, but one the country has had limited success in cultivating. As international perceptions of China’s power have changed, there are growing signs of international concern and sometimes even outright hostility toward the country.

For instance, a 2013 BBC survey found that China’s global reputation, tracked across 25 countries, has sunk to its lowest level since the annual study began in 2005. In 2013, there has been an average fall-off of 8 percentage points in positive views toward China, and an increase in negative views also by 8 percentage points. Of the countries in the survey, 13 now hold overall negative views of the country, against 12 in which the overall view is positive.

The BBC data is supported by Pew Global whose own annual survey points to a fall-off in favorability toward China in 14 of 19 countries surveyed in both 2011 and 2013. Double digit declines in these two years were recorded in states including Japan, the United States, and the United Kingdom.

The reasons for this fall-off are not uniform. For example, many in Japan are perturbed by what they perceive as Chinese military belligerence, while the U.S. public is concerned by Beijing’s alleged currency manipulation; the mammoth trade deficit with China and large U.S. financial debt held by Beijing, not to mention alleged Chinese cyber-attacks on U.S. interests.

As this critical scrutiny intensifies, Beijing must find better ways to tackle what is becoming a troubling soft-power deficit.

Most immediately, China must restart a process of addressing foreign concern about its intentions as a rising power. Here, it needs to intensify efforts to be seen as a responsible, peaceful power. And match this rhetoric with actions.

There also needs to be stronger commitment to domestic political change, transparency and concrete steps towards democratization. Many in the international community are likely to remain wary of the country while it clamps down on its own citizens seeking domestic reform, including human rights activists.

China’s image would also benefit from enhanced public diplomacy to win more foreign hearts and minds. At a symbolic level, example measures might include utilizing the country’s growing capabilities in space travel for high-profile international cooperation projects. Surveys underline that many people admire China’s strength in science and technology.

A broader reform needed is reducing the role of the central government, whose communications often lack legitimacy and credibility with people overseas, in Chinese outreach efforts. Here, the country would benefit instead by expanding the role of non-state groups – including from civil society networks, Chinese diaspora communities, sporting groups, student, academic groups and business networks.

This reform agenda poses major challenges for Beijing. However, unless it is tackled, China’s soft power deficit is only likely to grow, especially if its global profile continues to grow on its current trajectory.

© Japan Today

©2021 GPlusMedia Inc.

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At the end of the day, hats off to them. They have been very tenacious and probably made a lot of dodgy deals here and there, but what super power hasn't?. I personally hope the reform agenda goes through smoothly for them. Australia relies heavily on china economically so the better they do the better we do (australia).

I cant understand why people dont want to see another economic power house. Competition is always better for the consumers.

1 ( +3 / -2 )

In terms of perceptions, many people believe the economic balance of power has swung sharply toward China.

You mean that same China that keeps fudging their GDP numbers? The same China who's per capital GDP is on par with Haiti? The same China that's pushing fake GDP by building empty cities as fast as they can? That same China who's absolutely and utterly dependent on debt spending Americans to keep their economy afloat?

Uh, yea.

3 ( +6 / -3 )

It sounds like someone urging China to win a world beauty contest. But China is worrying about food, shelter, health, education, environment, security and general well-being of its citizens. And why should waste its time and energy worrying about being loved (soft power) by anybody. There is no precedent of a single country tackling the enormous task of uplifting the living standard of 1.3 billions people. It took centuries for some small countries to achieve what they have achieved in just three decades. Mistakes they will make as they go, but give them a chance, they will find their space in direction in the world.

2 ( +2 / -0 )

If China can stay away from garbage financial instruments they should do well. Number one buyer of physical gold right now. A very large economy that needs to service very a large population who generally doesn't trust their own government and the related corruption. =They really do not need to be fighting financial corruption so hopefully when they kill a few corrupt bankers the rest will clean up their act and go legit.

-1 ( +0 / -1 )

China did not buy any of the mass of toxic assets created by US (neither did Japan), with which the US shot itself in both feet and its head, and also shot Europe, who foolishly bought them. That story is still developing and the US and Europe may collapse. Also, US fear China because of massive debt to China? That is not China's fault! That is the US fault, living beyond their means. China has its problems (corruption) and China and Japan have their problems, but I'm glad Japan is next to China and in spite of the political posturing on both sides, Japan is economically well integrated with China. If only Japan could get rid of those stupid rightist politicians. And the bus loads of Chinese tourists are back in Shinjuku buying all the electronics stuff.

-3 ( +2 / -5 )

One thing that China has going for them is that they haven't bought into the incredible military buildup that the US has. Sure, China has increased military spending, but it's nowhere near what the US wastes.

It's also curious how China little by little becomes more and more capitalist while the US is looking more and more like the old Soviet Union every day.

0 ( +1 / -1 )

china still has 500 million peasant farmers living and working in the country side in abject poverty - safe to say that none of that new found economic power has and won't trickle down to them. Most of it stays within Shanghai and Beijing

0 ( +1 / -1 )

I hardly think a showdown of the west means China takes over, yes they have added a lot of modern industry and consumer production but their leadership and their foreign 'policy' is stone age and puts them squarely in the third world still. Sorry but words won't change reality, it makes a snappy headline but it is not truth. China has a long long long way to go before being called a global power. Such status takes much more than just power.

-2 ( +0 / -2 )

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