Comparing Global Influence: China’s and U.S. Diplomacy, Foreign Aid, Trade, and Investment in the Developing World
Congressional research reportAug 15, 2008
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Prepared for Members and Committees of Congress
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This report compares the People’s Republic of China’s (PRC) and U.S. projections of global
influence, with an emphasis on non-coercive means or “soft power,” and suggests ways to think
about U.S. foreign policy options in light of China’s emergence. Part One discusses U.S. foreign
policy interests, China’s rising influence, and its implications for the United States. Part Two
compares the global public images of the two countries and describes PRC and U.S. uses of soft
power tools, such as public diplomacy, state diplomacy, and foreign assistance. It also examines
other forms of soft power such as military diplomacy, global trade and investment, and sovereign
wealth funds. In Part Three, the report analyzes PRC and U.S. diplomatic and economic activities
in five developing regions—Southeast Asia, Central Asia, Africa, the Middle East, and Latin
America.
China and the United States use tools of soft power in different ways and with varying effects.
Since the mid-1990s, the PRC has adopted an increasingly active and pragmatic diplomatic
approach around the world that emphasizes complementary economic interests. China’s influence
and image have been bolstered through its increasingly open and sophisticated diplomatic corps
as well as through prominent PRC-funded infrastructure, public works, and economic investment
projects in many developing countries. Meanwhile, some surveys have indicated marked declines
in the U.S. international public image since 2002. Some foreign observers have criticized U.S.
state diplomacy as being neglectful of smaller countries or of countries and regional issues that
are not related to the global war on terrorism. According to some experts, U.S. diplomatic and
foreign aid efforts have been hampered by organizational restructuring, inadequate staffing levels,
and foreign policies that remain unpopular abroad.
Despite China’s growing influence, the United States retains significant strengths, including latent
reserves of soft power, much of which lie beyond the scope of government. Furthermore, by some
indicators, China’s soft power has experienced some recent setbacks, while the U.S. image abroad
has shown signs of a possible renewal. The United States exceeds the People’s Republic of China
(PRC) in global trade, although the PRC is catching up, and far surpasses China in GDP and
foreign direct investment. It continues to be the dominant external political and military actor in
the Middle East and political and economic influence in Latin America. The United States
maintains formal alliances in Europe and Asia, and far outweighs the PRC in military spending
and capabilities.
The 110th Congress has held hearings and proposed measures that support U.S. public diplomacy,
diplomatic efforts, and foreign aid. Relevant legislation includes the Implementing
Recommendations of the 9/11 Commission Act of 2007 (P.L. 110-53) and the Public Diplomacy
Resource Centers Act of 2007 (H.R. 2553).
This report will not be updated.
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PART ONE: OVERVIEW ............................................................................................................... 1
Introduction ..................................................................................................................................... 1
Contrasting Diplomatic Styles .................................................................................................. 1
China’s Economic Attractiveness ....................................................................................... 1
PRC and U.S. Soft Power in Five Regions ............................................................................... 2
Diplomacy........................................................................................................................... 2
Foreign Assistance .............................................................................................................. 3
A U.S. Resurgence?................................................................................................................... 4
Foreign Policy Interests and Implements of Power......................................................................... 5
The Post-Cold War Interlude..................................................................................................... 6
The China Model?..................................................................................................................... 7
Implications for the United States ........................................................................................... 10
Instruments of Hard and Soft Power ....................................................................................... 13
Assessing China’s Soft Power ....................................................................................................... 16
Limitations on Chinese Soft Power .................................................................................. 17
PART TWO: COMPARISONS OF U.S. AND PRC INSTRUMENTS OF HARD AND
SOFT POWER ........................................................................................................................... 18
Diplomacy and Foreign Assistance ............................................................................................... 18
U.S. Public Diplomacy............................................................................................................ 19
Background....................................................................................................................... 19
U.S. Educational and Cultural Exchange Programs ......................................................... 20
Funding ............................................................................................................................. 20
PRC Confucius Institutes and Language Training .................................................................. 23
Foreign Students...................................................................................................................... 23
State Diplomacy ...................................................................................................................... 24
U.S. Foreign Aid ..................................................................................................................... 25
Background....................................................................................................................... 25
Funding ............................................................................................................................. 26
China’s Foreign Aid ................................................................................................................ 28
Global Public Perceptions ............................................................................................................. 30
PRC and U.S. Military Diplomacy................................................................................................ 30
Overview of Military Budgets ................................................................................................ 31
Military Training ..................................................................................................................... 32
Peacekeeping Operations ........................................................................................................ 35
International Trade Flows.............................................................................................................. 37
Overseas Direct Investment........................................................................................................... 50
China’s Sovereign Wealth Fund .................................................................................................... 63
China’s Reasons for Creating China Investment Corporation ................................................ 64
Will and Can China Use the CIC as an Instrument of Soft Power? ........................................ 65
CIC’s Unintended Soft Power Effects..................................................................................... 66
PART THREE: REGIONAL COMPARISONS ............................................................................ 67
Southeast Asia ............................................................................................................................... 67
Cultural and Educational Exchange Activities........................................................................ 70
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U.S. Programs ................................................................................................................... 70
Foreign Students ............................................................................................................... 71
Diplomacy............................................................................................................................... 71
China’s Efforts to Boost Economic Ties with ASEAN..................................................... 72
U.S. Efforts to Bolster Trade with ASEAN ...................................................................... 73
High-Level Visits .............................................................................................................. 73
Foreign Assistance .................................................................................................................. 73
China’s Foreign Assistance ............................................................................................... 73
U.S. Foreign Assistance .................................................................................................... 76
U.S. Foreign Aid Sanctions............................................................................................... 77
Public Opinion ........................................................................................................................ 78
Central Asia ................................................................................................................................... 79
Cultural and Educational Exchange Activities........................................................................ 81
U.S. Government-Sponsored Exchange and Training ...................................................... 81
Chinese Programs ............................................................................................................. 82
Diplomacy............................................................................................................................... 83
U.S. Bilateral and Multilateral Relations .......................................................................... 83
China’s Bilateral and Multilateral Relations..................................................................... 90
Foreign Assistance .................................................................................................................. 94
U.S. Foreign Assistance .................................................................................................... 94
Congressional Conditions on Kazakh and Uzbek Aid ...................................................... 95
China’s Foreign Aid .......................................................................................................... 96
Africa............................................................................................................................................. 98
Economic Factors.............................................................................................................. 99
Political Factors .............................................................................................................. 100
Responses........................................................................................................................ 101
Implications for U.S. Policy............................................................................................ 103
Cultural and Educational Cooperation .................................................................................. 103
Chinese Education Cooperation...................................................................................... 103
Training........................................................................................................................... 105
Confucius Institutes in Africa ......................................................................................... 106
Other Exchanges ............................................................................................................. 106
PRC Youth Volunteers in Africa ..................................................................................... 106
PRC Media...................................................................................................................... 107
PRC Health Diplomacy................................................................................................... 107
U.S. Educational and Cultural Cooperation.................................................................... 108
Other Outreach, Public Diplomacy, and Cooperative Efforts..........................................110
Diplomacy..............................................................................................................................111
China’s African Policy .....................................................................................................111
FOCAC ............................................................................................................................111
Vehicles for PRC Diplomacy ...........................................................................................112
Regional Ties ...................................................................................................................112
African Union ..................................................................................................................113
Military and Security Issues.............................................................................................113
U.S. Relations ..................................................................................................................114
Foreign Assistance .................................................................................................................116
Chinese Assistance...........................................................................................................116
Aid Structure....................................................................................................................116
PRC African Aid Levels...................................................................................................117
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U.S. Assistance ................................................................................................................118
Public Opinion ...................................................................................................................... 121
Middle East.................................................................................................................................. 122
Cultural and Educational Exchanges..................................................................................... 123
China’s Cultural Diplomacy ........................................................................................... 123
U.S. Education Programs................................................................................................ 124
U.S. Public Diplomacy Efforts ....................................................................................... 126
Diplomacy............................................................................................................................. 127
Israel................................................................................................................................ 129
Iran .................................................................................................................................. 130
Saudi Arabia.................................................................................................................... 131
Iraq .................................................................................................................................. 132
Foreign Assistance ................................................................................................................ 132
Chinese Foreign Assistance ............................................................................................ 132
U.S. Foreign Assistance .................................................................................................. 133
Public Opinion ...................................................................................................................... 133
Latin America .............................................................................................................................. 135
Cultural and Educational Exchange Activities...................................................................... 138
China’s Activities ............................................................................................................ 138
U.S. Activities ................................................................................................................. 138
Diplomacy............................................................................................................................. 139
China’s Relations ............................................................................................................ 139
U.S. Relations ................................................................................................................. 141
Foreign Assistance ................................................................................................................ 143
China’s Foreign Aid ........................................................................................................ 143
U.S. Foreign Aid ............................................................................................................. 144
Public Opinion ...................................................................................................................... 146
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Figure 1. U.S. Relations with Countries and Regions and Potential Targets of Coordinated
U.S. Soft and Hard Power .......................................................................................................... 12
Figure 2. Combinations of Hard and Soft Power Used in Various Activities Aimed at
Wielding Power.......................................................................................................................... 15
Figure 3. Public Diplomacy Funding, FY1999-FY2009............................................................... 22
Figure 4. Funding for Public Diplomacy by Region, FY2007 ($million) ..................................... 22
Figure 5. Foreign Operations Appropriations, FY1999-FY2009($ Billions) ................................ 27
Figure 6. U.S. Foreign Economic Assistance, FY1999-FY2007 ($million) ................................. 27
Figure 7. U.S. Foreign Assistance by Region, FY2007 ($ billion)................................................ 28
Figure 8. PRC’s Announced Military Budgets, 1991-2008........................................................... 32
Figure 9. Total Trade (Exports + Imports) for China and the United States and the Ratio
of Total Trade of the United States to That of China.................................................................. 39
Figure 10. Projections for Total Trade (Exports plus Imports) in Merchandise for the
United States and China to 2020 ................................................................................................ 40
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Figure 11. U.S. and China’s Total Trade in Goods (Exports + Imports) in 2007 with
Selected Major Trading Partners ................................................................................................ 41
Figure 12. U.S. and China’s Exports of Goods to the World......................................................... 42
Figure 13. U.S. and Chinese Imports of Goods From the World .................................................. 42
Figure 14. U.S. and China’s Exports of Goods to Selected Regions of the World, 2007.............. 43
Figure 15. U.S. and China’s Exports of Goods to Selected Regions1995-2007 ........................... 44
Figure 16. U.S. and China’s Imports of Goods from Selected Regions of the World, 2007 ......... 45
Figure 17. U.S. and China’s Imports of Goods from Selected Regions1995-2007....................... 46
Figure 18. China’s and U.S. Imports of Mineral Fuel and Oil (HS 27) from Major
Supplier Countries in 2007......................................................................................................... 47
Figure 19. U.S. and China’s Imports from Selected Countries with Reportedly Serious
Human Rights Problems, 2007................................................................................................... 48
Figure 20. U.S. and China’s Exports to Selected Countries with Reportedly Serious
Human Rights Problems, 2007................................................................................................... 49
Figure 21. U.S. and China’s Conventional Arms Deliveries to Developing Nations, 19992006 (in Billions of Current Dollars) ......................................................................................... 50
Figure 22. U.S. and China’s Total Outbound Direct Investment (FDI) Flows .............................. 52
Figure 23. U.S. and China’s Foreign Direct Investment in Selected Regions of the World
and Over Two Time Periods ....................................................................................................... 53
Figure 24. China’s Outbound Direct Investment Flows to East Asia............................................ 54
Figure 25. Chinese and U.S. Annual Outbound Direct Investment Flows to East Asia................ 55
Figure 26. China’s Outbound Direct Investment Flows to Africa................................................. 56
Figure 27. Chinese and U.S. Outbound Direct Investment Flows to Africa ................................. 57
Figure 28. Chinese and U.S. Direct Investment in the Democratic Republic of the Congo,
Annual Flows and Cumulative Stocks ....................................................................................... 58
Figure 29. Chinese and U.S. Direct Investment in the Sudan, Annual Flows and
Cumulative Stocks...................................................................................................................... 59
Figure 30. Oil and Gas Concessions in the Sudan......................................................................... 60
Figure 31. China’s Outbound Direct Investment Flows to Latin America .................................... 61
Figure 32. U.S. and China’s Outbound Direct Investment Flows to Latin America ..................... 61
Figure 33. China’s Outbound Direct Investment Flows to the Middle East.................................. 62
Figure 34. U.S. and China’s Outbound Direct Investment Flows to the Middle East................... 63
Figure 35. Map of Southeast Asia ................................................................................................. 68
Figure 36. Map of Central Asia ..................................................................................................... 80
Figure 37. Map of Sub-Saharan Africa........................................................................................ 100
Figure 38. Map of the Middle East.............................................................................................. 122
Figure 39. Map of Latin America ................................................................................................ 137
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Table 1. Major Public Diplomacy Activities, Current and Constant Dollars, FY1999FY2009 Request......................................................................................................................... 21
Table 2. Foreign Operations Appropriations, FY1999-FY2009.................................................... 26
Table 3. U.S. Military Assistance: Actual Funding ....................................................................... 35
Table 4. U.S. Foreign Assistance to Southeast Asia (not including food aid), FY2006FY2008....................................................................................................................................... 76
Table 5. FY2006 U.S. Government-Sponsored Exchanges and Training with Central Asia ........ 81
Table 6. U.S. Peace Corps Volunteers in Central Asia .................................................................. 82
Table 7. U.S. Trade Capacity Building (TCB) Assistance to Central Asia FY2005FY2007....................................................................................................................................... 88
Table 8. U.S. Foreign Assistance to Central Asia, FY1992 to FY2008......................................... 95
Table 9. African Fulbright Grantees, 2006-2007......................................................................... 109
Table 10. U.S. State Department Bilateral Assistance to Africa: Main Bilateral/Regional
Accounts....................................................................................................................................119
Table 11. U.S. Non-MCC Assistance by Foreign Policy Framework Objective/Program
Area .......................................................................................................................................... 120
Table 12. The FY2009 Budget Request for Education Reform in Arab Countries ..................... 126
Table 13. A Decade of U.S. Assistance to the Middle East: FY2000-FY2009 Request.............. 134
Table 14. Views of China and the United States in the Middle East (Selected Countries),
2007.......................................................................................................................................... 135
Table 15. China vs. Taiwan: Diplomatic Recognition in Latin America and the Caribbean...... 140
Table 16. U.S. Foreign Aid to Latin America and the Caribbean FY2007-FY2009, by
account ..................................................................................................................................... 145
Table 17. Top Five U.S. Foreign Aid Recipients in the Western Hemisphere, FY2007FY2009..................................................................................................................................... 146
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Author Contact Information ........................................................................................................ 147
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In the past decade, China’s “soft power”—global influence attained through diplomatic,
economic, cultural, and other non-coercive means—has grown along with its international
standing.2 Despite this development, the United States remains the preeminent global force in
many areas of soft power. The United States exceeds the People’s Republic of China (PRC) in
global trade, and far surpasses China in GDP and foreign direct investment. It continues to be the
dominant external political and military actor in the Middle East and political and economic
influence in Latin America.3 It maintains robust, formal alliances in Europe and Asia, and far
outweighs China in military spending and capabilities. However, many analysts contend that U.S.
soft power has declined in relative terms, and some studies show a dramatic loss in global
confidence in the United States’ foreign policies. Some experts argue that China’s rise poses
serious challenges to U.S. interests, while others believe that its implications are limited and that
U.S. strengths remain formidable.
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The PRC has captured the attention of many developing countries due to its pragmatic approach
to diplomacy, the ways in which the government links diplomacy, commerce, and foreign aid, and
the dramatic expansion of its global economic influence. Since the end of the Cold War and the
acceleration of China’s economic take-off in the mid-1990s, Beijing’s “win-win” diplomatic style
has featured greater accommodation and an emphasis on short-term, common economic interests.
In the past several years, China’s proliferating trade, investment, and foreign aid accords with
other countries, made possible by its own rapid development, have stressed mutual benefits.
Through these agreements, China has gained markets for its goods, access to raw materials, and
international esteem while providing other countries with foreign investment and aid projects
without imposing conditions such as political and economic performance criteria. China’s style of
diplomacy and its foreign policy principle of “non-interference” have been characterized as
sensitive to local conditions rather than imposing standards. Many countries appear to appreciate
this style.
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Even without Beijing’s new brand of diplomacy, many developing countries are attracted to
China because of what its economy represents. In Southeast Asia and Latin America, the United
States continues to dominate trade and foreign direct investment. However, the PRC, which is
expected to rival the United States in terms of total trade by 2011, promises its economic partners
1
Written by (name redacted), Specialist in Asian Affairs.
For further detail on China’s growing soft power, see Congressional Research Service, China’s Foreign Policy and
“Soft Power” in South America, Asia, and Africa: A Study Prepared for the Committee on Foreign Relations, United
States Senate, April 2008.
3
The Latin America and the Carribean region is also referred to as Latin America or Western Hemisphere.
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ever-growing opportunities for trade and investment.4 China also is perceived as representing an
alternative, non-democratic model of development. Finally, many developing countries are drawn
to China’s example of asymmetric power.
Although the U.S. government’s projection of soft power has evolved to address new foreign
policy challenges in the post-9/11 world, many experts believe it has been less adaptable than
China to the changing needs of many developing countries. The U.S. emphasis on shared
democratic values, considered to be a pillar of American soft power, can be perceived in other
countries as an obstacle to arriving at solutions to international problems.5 Foreign policy
observers have raised several issues related to the U.S. use of soft power tools: Some experts
argue that the United States has neglected public diplomacy, particularly in helping to shape
foreign perceptions of American policy. Leaders in many developing countries assert that U.S.
bilateral and regional diplomacy has lacked sensitivity toward the local conditions in their
countries and regions. Others lament that U.S. foreign aid objectives and programs, which have
focused upon counter-terrorism and democracy-building, have placed a low priority on
development. Some countries have found U.S. criteria for foreign aid and free trade agreements
to be too stringent.
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Economics and diplomacy are the central, mutually reinforcing components of China’s growing
soft power in the regions discussed below. Trade, investment, and aid, particularly that which
involves gaining access to raw materials for China’s development, are behind much of the PRC’s
recent inroads throughout the developing world. Security and strategic concerns and goals also
play prominent roles in China’s soft power projections in Central Asia and Southeast Asia.
Competition with Taiwan for diplomatic recognition has spurred PRC engagement with Latin
America and Africa. For the medium-term, Chinese leaders appear to have accepted the military
dominance of the United States in Southeast Asia and the strategic roles played by Russia and the
United States in Central Asia. They also recognize the longer-term U.S. sphere of influence in
Latin America and U.S. strategic role in the Middle East. Contrasting ideologies and diplomatic
approaches between China and the United States may be starkest in the Middle East, where
Beijing has openly supported Arab and Palestinian causes and engaged in military cooperation
with Iran.
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The U.S. government public diplomacy and international military training programs aim in large
part to cultivate shared democratic values among the professional and leadership classes of
foreign countries. Despite cutbacks during the 1990s, U.S. public diplomacy programs, including
educational and cultural exchange activities, continue to facilitate an understanding of American
values and culture, the sharing of ideas, and access to many intellectual areas in which Americans
are world leaders. The regions with the largest U.S. public diplomacy efforts in terms of funding
are Europe/Eurasia and the Western Hemisphere (Latin America and the Carribean).6
4
Global Insight.
For further discussions of U.S. diplomacy, see Center for Strategic and International Studies, CSIS Commission on
Smart Power: A Smarter, More Secure America, 2007.
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The U.S. State Department refers to the Latin America and the Carribean region as Western Hemisphere.
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Likewise, the U.S. International Military Education and Training (IMET) program seeks to
promote democratic values, mutual understanding, and professional and personal relationships in
addition to military capacity. China’s fledgling public diplomacy counterparts, such as the
Confucius Institutes, place more emphasis upon teaching than intellectual exchange and upon
imparting an understanding of China rather than seeking common values through dialogue.
Furthermore, PRC foreign military training programs do not emphasize the building of personal
or cultural rapport between Chinese and foreign military officers.
While U.S. public and military diplomacy programs have helped to build a social layer of
professionals, academics, policy-makers, military leaders, and other opinion makers sympathetic
to American ideals in many countries, China also has made strides in the area of state diplomacy.
Beginning in the mid-1990s, Beijing’s ideological and isolationist foreign policy became more
engaged and pragmatic. The PRC began to promote its trade and security interests through
bilateral and multilateral cooperation. In the past several years, many observers note, China’s
conduct of official bilateral exchanges has appeared to be more active than that of the United
States, especially with smaller developing countries. Through these meetings, the PRC has
asserted itself as a global leader. China also has played a prominent or leading role in new
regional groupings that it has helped to establish, such as the East Asia Summit (EAS), the
Shanghai Cooperation Organization (SCO) in Central Asia, the Forum on China-Africa
Cooperation (FOCAC), and the China-Arab Cooperation Forum. By contrast, among leadership
circles in some regions, particularly Latin America and Southeast Asia, Washington has been
accused of neglecting regional concerns that are not related to the war on terrorism.7
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The United States continues to exert global foreign aid leadership and maintain a major, and
much appreciated, aid presence in Central Asia, Africa, the Middle East, and Latin America. U.S.
foreign assistance to Southeast Asia has increased markedly since 2001, although most new
funding has been directed at counter-terrorism and related programs in Indonesia and the
Philippines. Japan remains the dominant provider of official development assistance (ODA) in
Southeast Asia. In 2004, the Bush Administration launched two significant development aid
programs—the President’s Emergency Plan for AIDS Relief (PEPFAR) and the Millennium
Challenge Account (MCA)—which represent far more ambitious humanitarian and development
goals than does PRC aid. The MCA promotes good governance, investment in health and
education, and economic freedom by providing assistance to countries that satisfy performance
criteria. The U.S. State Department’s Middle East Partnership Initiative (MEPI) encourages
reform in four areas—politics, economics, education, and women’s empowerment—through
grants to non-governmental organizations (NGOs), businesses, and universities. The U.S. Peace
Corps, which has sent 190,000 American volunteers to serve in 139 countries since 1960, has no
real counterpart in China. The PRC’s six-year-old “youth volunteers” program has sent several
hundred Chinese youth to about one dozen countries in Asia, Africa, and Latin America.
In terms of ODA grants, the United States is the world’s largest foreign aid donor far exceeding
China. According to some estimates, China’s ODA ranges from $1.5 billion to $2 billion annually,
7
Cynthia Watson, “U.S. Responses to China’s Growing Interests in Latin America,” in Enter the Dragon? China’s
Presence in Latin America, Cynthia Arson, Mark Mohr, and Riordan Roett eds., with Jessica Varat, Woodrow Wilson
International Center for Scholars and SAIS, 2007; Diane K. Mauzy and Brian L. Job, “U.S. Policy in Southeast Asia,”
Asian Survey, Vol. 47, No. 4 (2007).
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compared to the United States’ core ODA budget of $19.5 billion in FY2007 (not including
military assistance).8 However, China’s emergence as a major foreign aid provider has had a
significant impact both in the developing world and among major foreign aid donors because of
its size, growth, availability, and symbolic value. The PRC often offers concessional loans, trade
deals, and state-sponsored investments as part of aid packages, and when these are included, PRC
aid may far surpass U.S. ODA. According to one study using unofficial reports of both actual and
pledged aid, Beijing provided or offered a total of $31 billion in economic assistance to Southeast
Asian, African and Latin American countries in 2007, a threefold increase compared to 2005 and
20 times greater than 2003.9
Chinese foreign assistance is attractive to many developing countries because it generally does
not require changes in the policies or performance of recipient countries’ governments.
Furthermore, PRC aid finances highly visible projects, such as infrastructure and government
buildings, that provide immediate benefits and recognition of China. The PRC also is providing
professional and technical training for people from developing countries, particularly in Africa.
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By some indicators, China’s rising soft power may have experienced some recent setbacks, while
the U.S. image has shown signs of a possible renewal. China has received criticism from other
major powers for its economic relations with many countries reported to have serious human
rights problems. China’s allegedly apolitical and mercantile foreign policy, lack of transparency,
and absence of political conditions and social and environmental safeguards on PRC foreign
investment and aid projects have brought some instances of public outcry against Chinese
political and economic influence in some developing countries. Perceptions of Beijing’s poor
domestic human rights record, including its policies toward ethnic minorities, also have
undermined its global image and influence. Many countries, particularly in Southeast Asia,
remain wary of Beijing’s intentions and doubtful of its sincerity even as they welcome PRC
economic ties and aid.
The United States possesses latent reserves of soft power. Many aspects of U.S. social, economic,
cultural, academic, technological, and other forms of influence, much of which emanate from the
private sector or outside the scope of government, remain unmatched in the world. Many
American ideals have long-term, universal appeal, while the United States continues to be a
magnet for immigrants and foreign students. Despite a perceived lack of attention among elites,
the United States has maintained favorable public image ratings in many African and Latin
American countries as well as in the Philippines, a U.S. ally. According to a recent poll,
Indonesians and Vietnamese regard U.S. and Japanese soft power as slightly greater than
China’s.10
8
Carol Lancaster, “The Chinese Aid System,” Center for Global Development Essay, June 2007.
http://www.cgdev.org; Lancaster; See also Phillip C. Saunders, “China’s Global Activism: Strategy, Drivers, and
Tools,” Institute for National Strategic Studies, National Defense University, 2006.
9
New York University Wagner School, “Understanding Chinese Foreign Aid: A Look at China’s Development
Assistance to Africa, Southeast Asia, and Latin America,” report prepared for the Congressional Research Service,
April 25, 2008. Many countries have reported that PRC pledged aid was not fully disbursed. According to the Wagner
School study, only about 3% ($93 million) is grant aid. By contrast, the United States provided a total of $6.65 billion
in grant aid to the three regions in 2007 (actually disbursed).
10
The Chicago Council on Global Affairs, Soft Power in Asia: Results of a 2008 Multinational Survey of Public
(continued...)
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Globally, negative views toward the United States appear to be significantly correlated to the Iraq
war. Attitudes can vary in response to changes in U.S. foreign policies, leadership, diplomacy, and
other instruments of soft power. On the one hand, this suggests that attitudes toward the United
States can change. On the other hand, in some cases, such as in the Middle East, U.S. public
diplomacy has had little impact within the context of unpopular U.S. foreign policies. New
foreign aid programs, such as PEPFAR and the Millennium Challenge Account, and U.S. disaster
relief efforts, such as those in Indonesia and Pakistan in 2005, have helped to improve the image
of the United States in some countries and regions.11 In the past two years, public perceptions of
the United States, particularly in Western Europe, Japan, South Korea, and India, have improved
somewhat in comparison to those of China. Among the countries with the widest image gaps
between the United States and China and that favor the United States are Poland, Japan, South
Korea, and India. Those that strongly favor China include Pakistan, Egypt, Jordan, and Indonesia.
While there are positive signs, the Pew Research Center suggests that much more work lies
ahead, stating that, overall, the U.S. image “remains far less positive than it was before the war
[in Iraq] and at the beginning of the century.”12
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While the challenge of China’s soft power does not alter vital U.S. interests, it affects the ways
and means the United States uses to protect its interests and attain its strategic goals. The rise of
China, political recidivism in Russia, and the war in Iraq give rise to concerns about what the
international power structure will be as we move through the 21st Century. The United States still
is the world’s foremost military power, largest economy, technology leader, and cultural magnet.
However, the pull of the “Chinese model,” the rise of competing centers of power, the emergence
of challenges not easily resolved using Cold War era implements of power, the decentralization of
security threats, unfavorable trends in world public opinion, and burgeoning U.S. financial
problems give pause to both scholars and policymakers.
The United States and China share the same vital national interests of security and prosperity,
although each has a particular additional interest and each defines its interests somewhat
differently. Each seeks freedom from fear and want and to preserve its territorial integrity. For the
United States, its particular interest lies in value preservation and projection of those values.
Many Americans view the spread of democracy and free markets as enhancing national security
and often seek improvements in human rights as part of their negotiating goals. China has a
particular existential interest in regime preservation or the survival of the Chinese Communist
Party as the sole ruler of China. This dovetails back into the Chinese vital interest of economic
prosperity. The Party needs economic growth in order to deliver a rising standard of living to the
people and provide legitimacy for its one-party rule.
(...continued)
Opinion.
11
Favorable views of the United States in Pakistan, at 19% in 2008, rose from 13% in 2003 to 23% in 2005. Favorable
views of the United States in Indonesia, now at 37%, rose from 15% in 2003 to 38% in 2005. The Pew Global Attitudes
Project, “U.S. Image Up Slightly, But Still Negative,” June 23, 2005; The Pew Global Attitudes Project, “Some
Positive Signs for U.S. Image,” June 12, 2008.
12
The Pew Global Attitudes Project, 2008, ibid.
13
Written by (name redacted), Specialist in Industry and Trade.
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The means, goals, and strategies by which each country pursues its national interests differ in
many important respects. Each country wields an array of hard and soft power that includes its
military, diplomatic and political activities, economic and financial clout, and considerable
cultural and informational appeal. Each country deploys its power, however, in different ways. In
cases, the differences may be subtle, but some are glaring. As for strategic goals, arguably each
country aims at maintaining internal and external stability and developing amicable and
cooperative relations with the rest of the world. At times, though, the need for security trumps
stability, and a country may undertake a destabilizing action (such a the invasion of Iraq). Each
occupies a different position in world leadership. Even China recognizes that the United States is
the only nation that has the will, stature, and means to mobilize the world community to
undertake the great projects of the day.14 China’s philosophy has been characterized as “live and
let live,” a more nonconfrontational approach that eschews outside interference in “internal
matters.” China portrays itself as a benign, non-colonial power with influence, deep pockets, an
ever expanding manufacturing base, and a nation that has lifted 300 million of its people out of
poverty and, therefore, has become a potent model for other developing nations. The United
States has long viewed itself as exceptional and a “shining city on a hill” for freedom-loving
peoples all over the world. It too has deep pockets. China likely recognizes that it is not the center
of the world, as its name in Chinese implies (often translated as Middle Kingdom), but it seems to
be wielding its soft power in order to pursue its national interests in ways not unfamiliar, but at
times anathema, to the United States. It appears that Beijing views its rise as a global force or at
least a dominant factor in East Asia as only a matter of time.15
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The victory by the Western world in the Cold War brought triumph not only for the military
strategists but also for those engaged in the great intangible battle for the hearts and minds of
aspiring peoples everywhere. The American model reigned supreme: democracy; free markets;
privatization; flows of international trade and investment; and a lifestyle of a home, car, and
education for one’s children. The model also placed the United States as an arguably benign
global power with unquestioned military supremacy and which could marshal European and other
resources to keep the peace. The Soviet model of socialist planning, one-party rule, satellite
states, the hard hand of repression, and building a military machine far beyond that which
government could afford collapsed with the Berlin Wall. Parallel with the American model was
European unification. Intra-European conflicts had ended. The specter of another World War
centered on Germany, France, and England faded as the European Coal Community evolved into
the European Economic Community and finally into the European Union. Diplomatic fusion,
economic integration, and the security umbrella provided by the North Atlantic Treaty
Organization directed European energies from internecine strife toward building a Europe to be
much more than the globe’s greatest outdoor museum.
At hardly any time did countries aspire to adopt the Chinese model. Mao’s disastrous Great Leap
Forward, Cultural Revolution, collective farms, state owned enterprises, egalitarian poverty
(except for Party insiders), and repressive government had little appeal except to other dictatorial
regimes. True, communist insurgencies in Southeast Asia inspired by Maoist doctrine and assisted
14
Scowcroft, Brent. “The Dispensable Nation?” The National Interest, July/August 2007, p. 4.
Yevgeny Bendersky and Michael A. Weinstein, “The Coming World Realignment,” The Power and Interest News
Report, June 20, 2005.
15
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by Beijing did gain some traction, but eventually most of them were suppressed. Now even
Vietnam has turned toward the American economic model, although it has retained a political
system more like that in China. Ironically, Beijing has been encouraging North Korea to follow a
Chinese-type model of economic reform that includes opening its borders to more trade, allowing
markets, and attracting foreign investments.16
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Some observers believe that in the future, China could displace the United States in much the
same way that the United States displaced England as the world’s great power. This view is heard
in many quarters: conservatives, liberals, nationalists, internationalists, and isolationists. Notable
is the articulation of a view of the seeming “inevitability” of the proposition that the “East is
back” with China leading the pack. For those espousing this view, the debate turns on when—not
whether—this power shift will happen and what the United States can do about it.17
Others, however, warn of trouble down the road for China,18 and others caution against linear
projections into the future and extrapolating onto the globe a decade or so of Chinese successes.19
One commentator writes that the Chinese threat or challenge is not likely to appear as another
Soviet Union, straining to keep pace with America’s military, but more likely to be an
“asymmetrical superpower,” one that manipulates a situation so effectively that the outcome
favors Chinese interests.20
In many respects, China epitomizes what may be called a “new wave” of regional powers. The
world is being confronted by a more ambitious China today, but not far behind are India and
Brazil as well as a sprinkling of populous nations, such as Indonesia or Nigeria, who are in the
ascendant and who feel that their time has been too long in coming. The concern over rising
Chinese power today might apply to the power of India and Brazil tomorrow.
As this memorandum shows, except for exports, China still lags behind the United States in most
metrics of power—both soft and hard. The rate at which China is closing the gap (commensurate
with its national interests) certainly has been accelerating, but the country still has a long way to
go. Further, the metrics belie what may be the real story of China’s ascendency. The actual story
may not be in who has the most guns, largest aid budget, or whose companies are trading with
and investing the most in developing nations, but it could lie in which national model is able to
capture the attitudes and actions (hearts and minds) of people, states, and non-state actors in the
world.
16
See, for example: Wu. Anne. “What China Whispers to North Korea,” The Washington Quarterly, spring 2005, pp.
43-44. Lim, Wonhyuk. “Kim Jong Il’s Southern Tour: Beijing Consensus with a North Korean Twist?” The Nautilus
Institute, c. February 2006.
17
Menon, Rajan. “The Changing of the Guard,” The National Interest On-line. January 2, 2008.
18
Shirk, Susan. China: Fragile Superpower: How China’s Internal Politics Could Derail Its Peaceful Rise, New York:
Oxford University Press, 2007. 320 p. Gordon Chang. The Coming Collapse of China, New York : Random House,
c2001. 344 p.
19
See also, (name redacted), China’s Rise and U.S. Influence in Asia: A Report From the Region, Issue Brief by the
Atlantic Council of the United States, July 2006. Bandow, Doug, “Going Overboard on China,” The National Interest
On-line, May 19, 2008.
20
Zakaria, Fareed, “Does the Future Belong to China?” Newsweek, May 29, 2005.
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The model China is offering is partly similar but contrasts strongly with much of the Western
model. Some have characterized this as the decline of the so-called “Washington Consensus”21
among developing countries and the rise of the “Beijing Consensus.”22 The Beijing Consensus
purports to represent the thinking of policymakers in China and underlies their approach to
relations with countries of the developing world. The essence of the consensus is that China,
India, and other countries that ignored the Washington Consensus have succeeded while those
who followed American advice or underwent World Bank or International Monetary Fund (IMF)
discipline have failed in many of their basic goals—such as lifting their populations out of
poverty. The Beijing consensus is skeptical about adopting wholesale Western economic ideals of
privatization and free trade, molding one’s political system to conform to Western-style
democratic institutions, and allowing markets to handle everything, even though China actually
adopted many of these policies in the process of its development over the past quarter century.
The Beijing consensus contends that nations can fit into the global system without abandoning
their way of life or compromising their independence (viz. authoritarian government). Countries
can choose the most useful aspects of the Western model and avail themselves of foreign
investments and technology without themselves becoming “Western.”
This Beijing Consensus is thought to have three primary principles:
•
use of innovation and cutting edge technology to create change that moves faster
than the problems that change creates;
•
management of chaos caused by change; and
•
self-determination or using leverage to hold away larger powers that may be
tempted to tread on your toes.
In practice, the Beijing Consensus implies rejection of the usual notion that workers in
developing economies must be consigned to sewing garments, working handicrafts, and
assembling toys. Countries can start at the labor-intensive, traditional industries, but they also can
move directly into high-technology both through foreign investment and by borrowing and
localizing existing world technology. When American semiconductor makers first began
operating in China in the early 1990s, they reportedly did so with the belief that the China market
would be a place to unload out-of-date chips. But the Chinese only wanted the newest, fastest
technology.23 China’s move directly into fiber optics rather than copper wire was driven partly by
the difficulty of protecting copper wire from thieves, but it also reflected the policy to jump
directly into 21st century telecommunications rather than languish in the leftovers from the labs of
Alexander Graham Bell. Chinese State Councilor Chen Zhili reportedly wrote that the country is
doomed unless Chinese society finds ways to innovate. She argued that science and technology
and human resources talent are the two pillars of China’s future. China’s problems, she says, are
simply too big for old solutions, too tremendous for anything but an army of great ideas and
successful implementation.24
21
Williamson, John. “A Short History of the Washington Consensus,” Paper commissioned by Fundación CIDOB for a
conference “From the Washington Consensus towards a new Global Governance,” Barcelona, September 24—25,
2004. The ten points of the Washington Consensus were: fiscal discipline, reordering public expenditure priorities, tax
reform, financial liberalization, a competitive exchange rate, trade liberalization, liberalization of inward foreign direct
investment, privatization, deregulation, and property rights.
22
Ramo, Joshua Cooper, “The Beijing Consensus,” The Foreign Policy Centre, Elizabeth House, London, 2004.
23
Ibid, p. 17.
24
Zhili, Chen, “Science & Technology and Talent: The Two Pillars of a Well Off Society” (Keji yu Rencai: Quanmian
(continued...)
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The second principle of “managing chaos” recognizes that once an economy “takes off” with
double-digit growth rates, society becomes an unstable stew of hope, raw ambition, fear,
misinformation, corruption, competing interest groups, and politics. Traditional society quickly
can give way to chaos (another term for political instability). In order to manage such chaos,
policies aimed at sustainability and equality—particularly for those left behind—become
important. When an economy doubles in size every seven years (growth rate of 10% per year),
governments really do not know beforehand what exactly will emerge from the rough and tumble
ruckus caused by economic transformation. No magic prescription exists that will both sustain
rapid economic growth and maintain stability. The Washington Consensus says to “leave it to the
market” and everything will work out eventually. Beijing’s approach is to recognize that since the
government has no previous experience to fall back upon, the Chinese people have to “wade
across the stream by feeling the way with one’s toes.” Policymakers can stay ahead of the chaos
only if they pursue policy innovations as problems occur. Central governments have to be strong,
and at times autocratic, in order to both implement innovative policies and to reverse those that
go bad before they cause too much damage.
One allure of this approach is that some countries are concluding that they can go their own way
without following prescriptions that seem designed primarily to benefit advanced industrialized
economies. Measures such as restricting life-saving medicines because of intellectual property
rights, exposing infant industries to global competition, saving old growth forests similar to those
cut down long ago in developed nations, or accepting macroeconomic strictures prescribed by
international financial institutions seem avoidable under the Chinese model. Human rights also
are not an issue, at least not in the legal sense. The primary attribute in the Chinese model today
is for people to be brought out of poverty, not necessarily to have legal freedoms. Developing
nations may well view this as an alternative to the economic reform requirements often imposed
by international lenders (such as the International Monetary Fund during various financial crises).
Rather than taking funding from the World Bank or IMF, they can simply “receive” Chinese aid
with no strings attached. (Of course, the rude awakening may come later when not all promised
aid is forthcoming.)
The third principle is self determination and using leverage to keep the great powers at bay.
Although China’s nuclear powered military resembles that of other military powers, Beijing
recognizes that not everyone can be a superpower, and not everyone needs to be. Every nation,
however, can be a power in its own right—perhaps not powerful enough for domination, but at
least strong enough for self-determination. China’s message to other countries may be that a
country does not have to win an arms race; it only needs to build enough asymmetric power to
keep hegemonic powers at water’s edge. A nation’s military exists primarily to deter conflict,
since in Chinese military thinking, armed conflict is usually an indication of failure. China’s
leverage stems partly from deterrent effect of its military but also from the strength of its
economic position and growing reliance of other countries on the web of trade and investment
relations with businesses in China. Trading partners now have a stake in the success of the
Chinese economy (and vice versa). The Chinese model also insists on national sovereignty (in
China’s case the one-China policy).
(...continued)
Jianshe Xiaokang Shihui de Liang Da Zhongyao Zhizhu), QiuShi, 2004, No. 374. Cited in Ramo, Joshua, “The Beijing
Consensus,” op. cit., p. 13.
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To many analysts in the United States, the rise of China and the allure of its model for
development is an indicator of the need for adjustment in U.S. foreign policy. The hard lessons of
Iraq combined with a deteriorating image of the United States in world public opinion also have
caused many in both the Pentagon and State Department to go back to the drawing board and
think creatively about the use of U.S. military, diplomatic, economic, and cultural power.
Secretary of Defense William Gates recently stated that the new thinking in overall U.S. defense
strategy is to build partner-nation capacity so friends can better defend themselves, and while
preserving U.S. conventional military deterrence abilities, to become more attentive to both
“hard” and “soft” elements of national power.25 Meanwhile, Secretary of State Condoleezza Rice
has proposed “Transformational Diplomacy” (working with other nations to build democracies
that respond to the needs of their people and conduct themselves responsibly in the international
system) and is attempting to create a Civilian Reserve Corps to assist in reconstruction efforts
following military action.26 Another aspect of soft power is to keep weak and failing states from
actually failing, descending into chaos, and becoming an incubator of or safe haven for terrorist
groups.27
Some analysts have devised the concept of “smart power,” a combination of hard and soft power.
Others, however, say the use of the word “smart” is elitist and condescending or that the use of
the phrase “soft power” seems politically untenable for those who already are being accused of
being soft on defense.28 A U.S. ambassador refers to an “all elements of power” strategy in
combating terrorism.29
Whatever name is used, the essence of the argument is that U.S. implements of power must be
used in an articulated, coordinated, and concatenated way in order to be more effective. Whether
the power be called hard or soft, the objective seems to be for U.S. military, diplomatic,
economic, or cultural power to be employed and combined in ways that cut across government
agencies and better protect and enhance U.S. interests.
The U.S. experience since 9/11 also has suggested certain considerations and constraints in
wielding U.S. power. These include the following:
•
large international tasks are most effectively tackled with large international
coalitions for financial, physical, as well as political support;
•
future wars involving the United States may well be asymmetrical and involve
soft power—a combination of military operations (against conventional as well
25
Robert M. Gates, Speech before the International Institute for Strategic Studies (Singapore), May 31, 2008.
Richard G. Lugar and Condoleezza Rice, “A Civilian Partner for Our Troops, Why the U.S. Needs A Reconstruction
Reserve,” Washington Post, December 17, 2007, P. A21. Condoleezza Rice, “Transformational Democracy,” speech at
Georgetown University, January 18, 2006.
27
Galvin, Thomas P. “Extending the Phase Zero Campaign Mindset,” Joint Force Quarterly, Issue 45, Second Quarter,
2007. pp. 48-51.
28
Goldenberg, Ilan. “It’s Time to Stop Talking About Soft Power,” The American Prospect (on-line version), May 29,
2008.
29
Dailey, Dell, “An ‘All Elements of Power’ Strategy for Combating Terrorism.” Policy Watch #1321, The
Washington Institute for Near East Policy, December 18, 2007.
26
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as insurgent forces), reconstruction, governance, and winning the hearts and
minds of people;
•
threats to U.S. security have become “democratized”—whether a single person, a
group, or an international network, all can potentially damage American people
or assets;
•
budget constraints are real both in terms of opportunity costs and for financing
foreign operations;
•
countries are placing more emphasis on national sovereignty—not just guarding
against outside incursions but, for some nations, rigidly controlling humanitarian
interventions or opposing foreign assistance to local non-governmental
organizations for political reasons;
•
as democratic institutions and societies become more entrenched (particularly in
developing nations), public opinion, nationalism, and attitudes become large
moving forces for governments (even autocratic governments use nationalism to
bolster public support);
•
international relations requires dealing not only with governments but with the
perceptions and attitudes of people under those governments;
•
globalization and technology have shrunk geographical distances among
countries and created more economic interdependence;
•
communications networks have so linked people of the world that everything
seems to have a public face; that face often can be distorted according to the
interests of those in the network; and
•
the rise in prices of commodities (particularly petroleum) and the U.S. trade
deficit are redistributing wealth away from the United States and other
industrialized nations toward commodity exporting nations (many are either
politically unstable or located in unstable regions) and toward China.
Given the above and other considerations, the question becomes where and how to exercise U.S.
soft and hard power in the post-9/11 world. As for the question of where, soft power naturally
flows everywhere, but it also can be channeled to particular countries or regions.
Figure 1 depicts a simplified view of the various countries and regions of the world with
characterizations of basic U.S. relations with those countries or regions. With allied nations
(NATO, Japan, South Korea, and Australia), relations are fundamentally sound although they may
need adjustment at times. Shared strategic visions, military commitments, economic interaction,
cultural affinity, and wide communication channels draw these nations together. Even with these
nations, however, government-to-government relations often have to be combined with public
diplomacy and building perceptions of trust and confidence to garner support for U.S. policies.
Russia and China are often considered to be potential strategic competitors, although the United
States engages heavily with each. The question with these two nations is how much hard power is
necessary to hedge against a possible future strategic confrontation.30 Some warn of a return to
30
See, for example: Barma Naazneen, Ely Ratner and Steven Weber, “A World Without the West,” The National
Interest, July/August 2007. P. 23.
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totalitarianism in Russia, but the probability of open hostilities with Russia seems remote. Even
Russian experts consider nuclear and large-scale wars with NATO or other U.S.-led coalitions no
longer probable and see cooperation with the United States and other industrialized countries
growing.31
Figure 1. U.S. Relations with Countries and Regions and Potential Targets of
Coordinated U.S. Soft and Hard Power
Problem
States
Alliance Relations
NATO, Japan, South
Korea, Australia
N. Korea
Iran
Multistate
Diplom acy
Strategic
Partners
China
Potential
Strategic
Com petitor
United
States
Russia
Potential
Strategic
Competitor
Occupation
Ongoing
Operations
Iraq
Afghanistan
Potential Targets of Coordinated Soft and Hard Power
Arc of Instability
North Africa
Middle East
South Asia
New Centers
of Power
India
Brazil
Other Countries
in Play
S.E. Asia
Latin America
Sub-Saharan Africa
Central Asia
Source: Congressional Research Service.
As for a possible military confrontation with China, some experts point to China’s growing
military budget and the possibility of a conflict over the Taiwan Strait. These fit well into a Cold
War mentality. The perceived security threat from China is magnified by Beijing’s lack of
transparency in clarifying its motives for its rising arms budget as well as its rumblings and
warnings about Taiwan independence.32 However, Dennis Blair, the former Commander-in-Chief
of U.S. Pacific Command, has written, “In evaluating China’s military actions, it is most
important to make judgments based on real military capabilities, not on blue-sky projections of
individual Chinese actions.” He argues that although China has raised suspicions that it may be
developing military force for use in the East Asia region and further, the PLA (People’s
Liberation Army) has not developed nor demonstrated even the rudiments of the actual
capabilities to do so.33 Since China’s intentions are unknown, the strategy of the Defense
31
de Haas, Marcel. “Russia’s Military Strategy; Preparing for the Wrong War? Power and Interest News Report, April
24, 2006.
32
For details, see U.S. Department of Defense. Military Power of the People’s Republic of China, 2008, Annual Report
to Congress. 56p.
33
Blair, Dennis. “China’s Military Modernization on Land and Sea and in the Air and Space: Relevance to U.S.
(continued...)
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Department has been to pursue a balanced approach by shaping the choices of major and
emerging powers in a way that seeks cooperation but also creates prudent hedges against the
possibility that cooperative approaches by themselves may fail. The strategy is also to induce
China to become a constructive actor and stakeholder in the international system34 and to strive to
ensure that preparing for a possible military confrontation does not in itself trigger one.
There are other ways, however, in which China could threaten U.S. power. One would be a
Chinese alignment with autocratic energy exporting countries to collaborate strategically to limit
U.S. power.35 Another one would be an “Eurasian Entente,” a loose alliance between Russia and
China aimed at thwarting the interests of the United States.36 China and Russia have stepped up
their strategic cooperation, but such countervailing alliances still seem far from being realized,
and historical Sino-Russian enmities will likely limit how far that relationship can go. (The
Shanghai Cooperation Organization is a fledgling attempt at drawing China, Russia, and three
countries of Central Europe into an organization addressing security, economic, and cultural
concerns.)
For North Korea and Iran, relations are dominated by nuclear concerns. Interaction with these
states is primarily through multinational diplomacy. With North Korea, both China and South
Korea have used a considerable amount of economic, diplomatic, and cultural soft power in
dealing with the Kim Jong-il regime, but progress has been slow.
As for operations in Iraq and Afghanistan, these are large problems where both hard and soft
power are being used to the maximum. The United States dominates in decision making here, and
the Chinese model has little relevance.
The countries in which Chinese soft power competes most directly with that of the United States
fall into three categories: the arc of instability stretching from North Africa through the Middle
East and into South Asia, other countries in play (Southeast Asia, Latin America, Sub-Saharan
Africa, and Central Asia), and new (and re-emerging) centers of power, the so-called BRICs
(Brazil, India, as well as Russia and China, for U.S. soft power). There is some overlap in the
categories, but in essence these mainly are countries of the developing and newly industrializing
world. Some are democratic, some autocratic, and each represents a potential power node. The
United States is in competition for the hearts and minds of citizens of these countries. Some have
de facto chosen sides, and others are following development paths that may or may not bring
them into conflict with American values and interests.37
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The tool kit of U.S. hard and soft power includes the military, diplomacy, economics, and culture
38
along with several intangibles that result from U.S. actions. These include credibility, trust, and
(...continued)
Policy,” in The Aspen Institute, U.S.-China Relations, Vol. 23, No. 2, March 24-30, 2008, pp. 25-26.
34
U.S. Department of Defense. Quadrennial Defense Review Report, February 6, 2006, p. 10.
35
Leverett, Flynt. Black Is the New Green,” The National Interest, January/February 2008, p. 44.
36
Wilson, Peter A., Lowell Schwartz and Howard J. Shatz. “Eurasian Invasion,” The National Interest, May/June 2008,
p. 43.
37
Barma Naazneen, et al., “A World Without the West,” op. cit., p. 30.
38
Law enforcement is another means for wielding power.
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general amicability. Military forces include not only those actually engaged in combat but the
threat of their use in offensive, defensive, and retaliatory operations. Diplomacy includes political
forces, a nation’s system of governance, alliances, and international relationships. The economy
includes a nation’s economic power, economic assistance, trade, foreign investment, financial
position, and preferential trading arrangements. Cultural resources include the media,
information, public diplomacy, communications, and traditional propaganda.
Figure 2 depicts these tools of power and illustrates various combinations of them that typically
are used in accomplishing ends or goals in international affairs. The percentages are not based on
actual metrics but attempt to depict various combinations of the tools of power that can be used in
different activities aimed at wielding power to change the behavior of other nations. The figure
begins with the least forceful ways by which implements of power may be used—co-optation—
and proceeds through increasingly forceful ways until countries reach open warfare and
occupation.
Co-opting other nations refers to a process of bringing them into international groupings or ways
of thinking in order to align their interests with yours. It is primarily a non-aggressive strategy
that relies heavily on the use of information, economics, and diplomacy, although military
considerations are always in the background. It is the fundamental premise behind many of the
world’s alliances, country groupings, the World Trade Organization, and other international
institutions. Co-optation also works at corporate and individual levels. Corporations engage in
international trade and investment, and individuals work in businesses owned by foreign
companies. In these cases, corporate and worker interests on particular issues can align more with
foreign than domestic interest groups. It also is the theory behind the democratic peace
hypothesis: democracies tend not to fight each other because of shared values.
Co-optation is particularly important given the democratization of security threats, particularly
terrorism. If anyone in the world can pose a potential security threat, then any security strategy
must include winning the hearts and minds of people who might opt to engage in such activity (or
those around them who might either support or report such activity to appropriate authorities).
Persuasion refers to a process by which an entity is induced to behave in a particular way
primarily because of changes in its own interests or because of specific concessions offered by
other nations. Here diplomacy plays a key role along with economic enticements, political
pressures, information, and the military in the background. A country may be persuaded to behave
in a more positive way without an overt external threat of use of military force.
For deterrence, the military plays a greater role by changing the target nation’s perception of the
costs and benefits of taking or not taking certain actions. The credibility of the military force
becomes key, but the issues usually are resolved through diplomacy. Threats of a pre-emptive
strike or trade sanctions may be used. So far, China has been deterred from taking Taiwan by
force partly because of the negative military and political consequences that likely would ensue.
If deterrence by threat fails, overt military action can be employed either to preempt or deny. If
that also fails, war may ensue, and the military may be used to retaliate—in order to deter any
similar adverse actions in the future.
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Figure 2. Combinations of Hard and Soft Power Used in Various Activities Aimed at
Wielding Power
100%
Percent
Culture
Information
Culture
Information
80%
60%
Economy
Aid
Trade
Economy
Aid
Trade
Diplomacy
Politics
Governance
40%
Diplomacy
Politics
Governance
20%
Military
Occupation
Post-Invasion
Invasion
Deterrence
Persuasion
0%
Cooptation
Military
Activity
Source: Congressional Research Service
The next three activities are included to illustrate how the mix of hard and soft power changes in
a sequence of military invasion, post-invasion, and occupation. The Chinese model has little
relevance here. The chart depicts a rough symmetry with reliance on soft power declining as the
use of hard power rises but then soft power increasing as hard power operations wind down.
Changes in the mix of U.S. power prior to overt military action also may affect how both hard
and soft power may be used after the battles end.39
In summary, many voices in policy circles in Washington are calling for the United States to
wield its hard and soft power in a more coordinated and articulated way. This has arisen partly
from the perceived successes of China in its attempts to win the hearts and minds of people in the
developing world, but perhaps more from the complications of the Iraq War, the threat of
39
While an invasion is primarily a military activity, the immediate post-invasion period requires a combination of
military and civilian authorities. A prolonged occupation, depending on the extent of local resistance, requires less and
less military action and more political, economic, and informational activity. A policy issue for the United States may
be to determine the proper mix of instruments of power for each activity and to ensure that the appropriate resources
are available to accomplish each task. Should the military be more involved in nation building, or should the State
Department provide more for its own security? How best can the military, diplomatic, and economic tools be combined
to pursue certain U.S. objectives? Are there things China does well that the United States needs to account for or
emulate? Some of this policy debate already is being implemented. The efforts of the U.S. Central Command’s
Combined Joint Task Force-Horn of Africa is a case in point. Here the military is attempting to prevent conflict through
humanitarian assistance that includes building health clinics, renovating schools, and providing fresh water sources—
tasks usually done by aid agencies or non-governmental organizations. The provincial reconstruction teams in Iraq are
another example. They consist of civilian-military teams intended to help provincial governments with governance,
economics, infrastructure, rule of law, and public diplomacy.
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terrorism, and the problems of globalization. However appealing this developing “consensus”
appears on the surface, though, it faces the “devil in the details.” It includes the long-running
debate over the size of various means used to project U.S. power, particularly the budget of the
Pentagon, the specific capabilities of the various instruments of power, the appropriate mix of
hard and soft power, and whether new institutions are necessary to cope with the challenges of the
21st century.
ȱȂȱȱ ŚŖȱ
Although Beijing has adopted a more accommodating and multilateralist foreign policy and has
not challenged the global “status quo,” many experts disagree about the PRC’s capabilities and
long-term intentions and as well as the implications of China’s rise. Some analysts warn that
China’s growing soft power reflects a set of well-funded, integrated foreign policy goals,
developed to secure and advance China’s economic and security interests at the expense of the
United States. Others argue that China’s rise is limited in scope, vulnerable to domestic shocks
and public backlash in foreign countries, and represents a trend toward greater integration in the
global community. Furthermore, this argument goes, U.S. military might, foreign aid resources,
trade and foreign direct investment, and intellectual and cultural influences remain formidable.
Many countries continue to seek strong diplomatic, economic, and security relations with the
United States even while cultivating ties with China.
Regarding China’s goals, some observers contend that China’s most pressing concerns, at least in
the short- to medium-term, are domestic (focused on economic growth and social stability).
Furthermore, they argue, Beijing favors a stable periphery and knowingly benefits from the U.S.
role in helping to maintain global security. To the extent that China may exploit its soft power for
strategic ends, it is to forestall possible “containment” rather than to pursue expansion.41
Many analysts believe that economic development rather than military supremacy is the primary
objective for China’s international engagement for a host of reasons—not the least of which are to
raise the living standards of its enormous population, to dampen social disaffection about
economic and other inequities, and to sustain regime legitimacy after the demise of communist
ideology as an acceptable organizing principle. China’s annual economic growth rates routinely
are in the double digits; in 2007, they reached an annual rate of 11.4 percent—the highest since
1994.42 This rapid and sustained economic growth has created voracious domestic appetites for
resources, capital, and technology. At the same time, Chinese growth has been driven by the
development of overseas markets for its goods. These twin developments have served as powerful
drivers of China’s international trade and investment agreements as well as foreign aid, key
components of its soft power.
40
Written by (name redacted), Specialist in Asian Affairs.
For a look at the debates on the implications of China’s growing “soft power,” see (name redacted), China’s Rise in
Asia: Promises and Perils (New York: Rowman and Littlefield, 2005); Bronson Percival, The Dragon Looks South:
China and Southeast Asia in the New Century (Westport: Praeger Publishers, 2007); Joshua Kurlantzick, Charm
Offensive (New Haven: Yale University Press, 2007).
42
Xie Fuzhan, Commissioner, National Bureau of Statistics of China, “The National Economy Maintained a Steady
and Fast Growth in 2007,” January 24, 2008.
41
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In energy sources alone, for example, China became a net importer in 1995 (it became a net
importer of oil in 1993). Its energy demands are expected to continue increasing at an annual rate
of 4%-5% through at least 2015, compared to an annual rate of about 1% in industrialized
countries.43 China steadily and successfully has sought trade accords, oil and gas contracts,
scientific and technological cooperation, and de-facto multilateral security arrangements with
countries both around its periphery and around the world. Access to energy resources and raw
commodities to fuel China’s domestic growth has played a dominant role in these relationships.
Many of these activities are tied to PRC pledges of foreign aid.
In pursuit of sustainable economic development, China also is seen to have placed a priority in
keeping stable and relatively tension-free relations with its primary export market, the United
States, and with other countries and regions. According to this view, Beijing calculates that even
the appearance of a more overt pursuit of its regional and global interests could prompt the United
States and other countries to strengthen their alliances or form other groupings to counterbalance
and deter China’s international outreach. Such a development in turn could fetter China’s
economic growth.
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China’s “win-win” approach to international interactions often is considered more symbolic than
substantive. Easy things are taken care of first, while inconvenient and difficult things are
postponed, possibly indefinitely. Moreover, a “win-win” strategy is a slender reed for maximizing
comprehensive soft power. The soft power potential that the PRC can hope to gain from such a
strategy, many believe, pales next to the national capacity and willingness of the United States to
take on costly and difficult global tasks such as international disaster aid. To date, they contend,
nothing in Beijing’s current soft power approach suggests that it is willing to embrace such
altruism. Moreover, China’s lack of transparency raises consistent doubts about whether the
levels of aid and investment triumphantly announced are the levels of aid and investment actually
provided.
Even with a “win-win” strategy, acquiring and maintaining an enhanced international presence
brings with it certain complications. Among other things, it provides almost innumerable
opportunities for international misunderstandings, resentment, and repercussions. Cultural
backlash may be heightened by the style that PRC foreign investments and construction projects
have pursued to date—involving the import of Chinese workers instead of using the local
population or providing substandard labor conditions for local workers. Chinese overseas
operations already have begun to experience fallout from their activities: PRC oil drilling sites
and well-workers have been attacked, kidnapped, or killed in Sudan, Somalia, Nigeria, and
elsewhere in Africa. Some Central Asian countries have grown concerned about the level of
energy assets that China has been accruing within their borders and have moved to limit such
acquisitions. As China’s international activities expand, tensions along these lines are likely to
increase, possibly garnering unfavorable publicity for the PRC and putting stress on the “winwin” approach.
Foreign entanglements also could raise political problems at home for PRC policymakers. The
increasing availability of Internet and cell phones—China now has the world’s largest numbers of
43
“China’s Energy Production and Consumption,” Energy Information Administration (EIA); Official Energy Statistics
from the U.S. Government. http://www.eia.doe.gov/emeu/cabs/china/part2.html.
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Internet and cell phone users—assures that growing numbers of Chinese citizens have more
access to information, including information about China’s international activities. Confirmation
that China is investing millions of dollars in overseas projects, while at home unemployment
grows and infrastructure development lags, may prove objectionable to the hundreds of millions
of PRC citizens still living below the poverty line—much the way many Americans sometimes
react to U.S. overseas investment.
As noted above, Beijing is seen to have advantages over the United States in that its overseas
activities and investments are conducted by strong, well-funded state-owned companies. These
large PRC government activities attract much international attention and give a “hard” edge to
PRC soft power. The United States has little to match such centrally directed initiatives,
particularly in the wake of years of U.S. budget cutbacks in—and in the case of the U.S.
Information Agency, the termination of—high-profile U.S. international public diplomacy
programs. But comparing only government-directed and -funded activities overlooks the huge
advantage the United States has in the extent of its substantial global private-sector presence. In
addition to U.S. business interests, American products, schools, newspapers, journals, banks,
movies, TV programs, novels, rock stars, medical institutions, politicians, Chambers of
Commerce, state governments, culture, religious groups, ideas, NGOs, and other American
institutions and values are liberally scattered over the global map. While this U.S. presence is
diverse and uncoordinated, and at times triggers anti-American feelings, it nevertheless leaves a
substantial global footprint. This wealth of U.S. influence may provide resources for U.S. soft
power strategy.
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The following section examines three aspects of non-economic soft power—public diplomacy,
state diplomacy, and foreign assistance. It compares U.S. and PRC efforts in a range of areas,
including educational and cultural exchanges, bilateral and multilateral diplomacy, and foreign
aid funding and approaches. In the past decade, Beijing has emphasized relatively short-term,
economic “mutual benefits” while using these tools of soft power. This approach, on balance, has
had a positive impact on elite and public perceptions of China in many countries.
By contrast, the United States, particularly since 2001, has focused upon longer-term goals of
combating terrorism as well as promoting democratic governance and market-oriented economic
development. The Bush Administration’s five-year, $15 billion President’s Emergency Plan for
AIDS Relief (PEPFAR) reportedly has helped to bolster public opinion in favor of the United
States in Africa while humanitarian assistance in places such as Indonesia also have helped to
boost U.S. standing.44 However, many countries have not benefitted from counter-terrorism,
PEPFAR, or Millennium Challenge Account (MCA) assistance. In 2007, over three-fourths of
44
CSIS, op. cit. In a 2005 Pew survey, 79% of Indonesians polled said that they had a more favorable view of the
United States because of its relief efforts in their country after the 2004 tsunami. Pew Global Attitudes Project, “U.S.
Image Up Slightly, But Still Negative,” June 23, 2005.
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U.S. assistance to the Middle East consisted of military assistance. In the past decade, U.S. public
diplomacy has faced serious challenges to its effectiveness, including the elimination of the U.S.
Information Agency (USIA), inadequate staffing, and widespread global opposition to the U.S.led war in Iraq.
The U.S. government administers a wide array of educational and cultural exchange programs,
emphasizing research, values, and ideas that may transcend national boundaries. U.S. research
universities continue to rank among the world’s top educational centers and attract foreign
students, many from India and China. By contrast, China’s most prominent counterpart, the
Confucius Institutes, which teach students in other countries about Chinese history and culture,
have less universalistic appeal. Nonetheless, they represent a new component in China’s strategy
to merge its economic influence with efforts to promote an understanding of its view of the world.
The 110th Congress has held hearings and proposed measures that support U.S. public diplomacy,
diplomatic efforts, and foreign aid. The House Committee on Foreign Affairs held two hearings
on reforming foreign assistance and diplomacy. (March 8, 2007 and June 25, 2008) The
Implementing Recommendations of the 9/11 Commission Act of 2007 (P.L. 110-53), includes
provisions supporting greater communication of U.S. policies and promotion of U.S. values. The
Public Diplomacy Resource Centers Act of 2007 (H.R. 2553), passed by the House and reported
favorably by the Senate Committee on Foreign Relations, would provide for the establishment of
new, and maintenance of existing, libraries and resource centers at or in connection with U.S.
diplomatic or consular missions.
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Public diplomacy is the promotion of America’s interests, culture and policies by informing and
influencing foreign populations. The Department of States proclaims that the goals of U.S. public
diplomacy strategy include promoting democracy and good governance and marginalizing
extremist leaders and organizations.46 The U.S. government first officially acknowledged its use
of public diplomacy activities in the early years of the 20th century when President Woodrow
Wilson created the Committee on Public Information to disseminate information overseas during
World War I.
ȱ
In 1941 during World War II, President Roosevelt established the Foreign Information Service to
conduct foreign intelligence and propaganda. The next year President Roosevelt created the
Office of War Information (OWI) which aired the first Voice of America (VOA) program on
February 24, 1942 in Europe. These activities were carried out without any authority or
recognition provided by Congress.
The U.S. Information and Educational Exchange Act of 1948 (P.L. 80-402), popularly referred to
as the Smith-Mundt Act,47 provided the first overarching legislation authorizing broadcasting and
cultural activities, although they had already been going on throughout the 1940s.
45
Written by Susan Epstein, Specialist in Foreign Policy, and (name redacted), Specialist in Asian Affairs.
Department of State, “Budget in Brief: Fiscal Year 2009.”
47
Named for the two primary sponsors of the legislation, Representative Karl Mundt (Republican from South Dakota)
(continued...)
46
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Throughout the 1990s, both Congress and the executive branch, in the post-Cold War climate,
reduced public diplomacy activity funding, and in 1999 abolished the primary public diplomacy
agency, the U.S. Information Agency—USIA, altogether. During the 1990s, public diplomacy
often was viewed as less important than political and military government functions and,
therefore, was seen by some legislators as a pot of money that could be tapped for other
government activities. Many U.S. policymakers now recognize the importance of how America
and its policies are perceived abroad. At the same time, some observers believe that there are
limits to what public diplomacy can do when the problem is not foreign misperceptions of
America, but rather disagreements with specific U.S. foreign policies. A major expansion of U.S.
public diplomacy activities and funding cannot change that, they say.
According to a Pew survey, in 2000, more than 50%, and as high as 83%, of foreign populations
around the world held favorable views of the United States.48 A number of decisions early on by
the Bush Administration including refusing to sign onto the Kyoto Treaty, the International
Criminal Court, the Chemical Weapons Ban, and the Anti-Ballistic Missile Treaty, lessened
foreign opinion of the United States. After the September 11, 2001 terrorist attacks, people around
the world expressed shock and support for the U.S. government. Since then, however, negative
attitudes about America have increased. After the decision to go to war with Iraq, foreign opinion
of the United States fell sharply, not only in the Arab and Muslim world, but even among some of
America’s closest allies. Many suggest that, ongoing issues, such as prisoners held at
Guantanamo Bay and the Abu Ghraib prison torture situation, continue to exacerbate a poor
world view of the United States.
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The United States government sponsors a broad array of cultural and educational exchange
programs for the purpose of “increasing mutual understanding.” The State Department’s Bureau
of Educational and Cultural Exchange administers a number of programs, including the Fulbright
Program, English language programs, an American speakers program, citizen exchange programs,
student leader programs, and English language programs. There are approximately 30,000
participants each year.49 U.S. embassies also oversee the U.S. Speakers Program, in which
American subject-matter experts address selected audiences in foreign countries on a range of
policy issues and various aspects of American society. The largest regional beneficiaries of U.S.
exchange programs in terms of funding are Europe and Eurasia and East Asia and the Pacific.
ȱ
Public diplomacy consists primarily of three categories of activities: (1) international information
programs (IIP), (2) educational and cultural exchange programs, and (3) international nonmilitary
broadcasting. The Under Secretary of State for Public Diplomacy and Public Affairs administers
the Bureau for International Information Programs and the Bureau for Educational and Cultural
Affairs, while the Broadcasting Board of Governors manages and oversees international
broadcasting. Table 1 below shows that total public diplomacy spending nearly doubled between
(...continued)
and Senator Alexander Smith (Republican from New Jersey).
48
Views of a Changing World, The Pew Global Attitudes Project, June 2003.
49
http://www.cap-aed.org/index.php?id=166.
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FY1999 and FY2007 (the most recent actual data). (See Figure 3.) The regions with the largest
funding for public diplomacy (FY2007) are Europe/Eurasia and Western Hemisphere (Latin
America and the Caribbean). (See Figure 4.) For FY2009, the Bush Administration requested
$395 million for International Information Programs “to influence foreign opinion and win
support for U.S. foreign policy goals.”50
Table 1. Major Public Diplomacy Activities, Current and Constant Dollars,
FY1999-FY2009 Request
($ million)
Fiscal years
FY1999
FY2000
FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008 est.
FY2009 req.
Int’l Info
Programs
(IIP)
Int’l
Exchanges
Int’l
Broadcasting
Total
(current $)
Total
(constant $)
n.a.
234.3
246.1
280.3
298.8
300.1
315.7
334.7
351.2
358.0
394.8
200.5
204.2
231.6
238.7
243.7
316.6
355.9
431.3
465.7
501.3
522.4
397.0
420.2
450.4
551.9
533.8
591.6
598.8
680.1
656.8
682.0
699.5
597.5
858.7
928.1
1,070.9
1,076.3
1,208.3
1,270.4
1,446.1
1,473.7
1,541.3
1,616.7
597.5
837.1
884.0
1,001.4
980.3
1,069.5
1,084.5
1,194.0
1,190.7
1,212.5
1,243.4
State Department Congressional Budget Justifications, FY2001-FY2009 and the Broadcasting Board of
Governors. Constant $ are CRS calculations based on a 1999 deflator.
Note: The Department of State includes other smaller activities, such as the National Endowment for
Democracy, U.S.-Israeli Scholarship Program, the East-West Center, and Eisenhower Exchange Fellowship
Program which combined total less than $100 million and are not included in this table.
Source:
50
Department of State, “Budget in Brief: Fiscal Year 2009.”
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Figure 3. Public Diplomacy Funding, FY1999-FY2009
1800
1600
1400
$ Millions
1200
1000
current $
constant $
800
600
400
200
0
FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009
e
Fiscal Years
Figure 4. Funding for Public Diplomacy by Region, FY2007 ($million)
South/Central Asia 20.5
Near East 24
East Asia-Pacific 39.9
Africa 36
Western Hemisphere 47.6
Europe/Eurasia 91.4
Source:
U.S. Department of State
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The PRC government has established an office for promoting Chinese language and culture as
part of a global public diplomacy effort. China’s National Office for Teaching Chinese as a
Foreign Language, or Hanban, reportedly has established 210 Confucius Institutes worldwide in
64 countries and regions since 2004 to teach Chinese language and culture. Some observers assert
that these centers will help China to cultivate friendships and promote an understanding of China
throughout the world. They typically are located in colleges and universities in host countries
under cooperative arrangements with Chinese educational institutions. More than 200 educational
institutes in 61 countries and regions reportedly have applied to open up Confucius Institutes,
while China has trained more than 300 teachers and spent $26 million on textbooks and audio
equipment for this purpose.52 Other PRC efforts include hosting overseas scholars in programs
similar to U.S. government-sponsored scholarly exchanges and attracting and expanding facilities
for foreign students.53
According to the PRC government, in 2005, more than 30 million people outside China were
studying Chinese, although the vast majority of them were not sponsored by the Chinese
government.54 The PRC National Office for Teaching Chinese as a Foreign Language predicted
that by 2010, 100 million persons around the globe will be learning Chinese.55 However, the
attraction to Chinese language often reflects more an interest in Chinese economic opportunities
than a desire to emulate Chinese politics, society, or culture.56
ȱȱ
The United States, with its first-rate universities, continues to attract far more foreign students
than does China. In 2007, the U.S. Department of State issued more than 600,000 student and
exchange visitor visas, an increase of 10% over 2006, following several years of decline. The
second and third largest centers for foreign students are the U.K. and Germany, each with less
than half the U.S. number.57 In 2007, 195,000 foreign students reportedly were studying in China.
China has ambitious plans to enroll more foreign students. The U.S. government tightened its visa
policies following the September 11, 2001 terrorist attacks, leading to cases of bureaucratic
bungling, perceptions that the United States no longer welcomed foreign students, and three years
of declining enrollment. During this time, China not only loosened its own requirements, but
announced goals to attract more students from abroad. Other countries in Europe, Oceania, and
Asia also launched recruitment efforts to attract foreign students, including those from China,
51
Written by (name redacted), Specialist in Asian Affairs.
“Chinese Education Minister Vows to Maintain Sound Development of Confucius Institute,” China Economic
Information Service, Xinhua News Agency, December 12, 2007.
53
Joshua Kurlantzick, “China’s Charm Offensive in Southeast Asia,” Current History, September 2006; “Beijing’s
‘Soft Power’ Offensive,” Asia Times, May 17, 2007. http://www.atimes.com; Gareth Powell, “Building Confucius
Institutes into a ‘World Brand’,” China Economic Review, December 18, 2007.
54
“China to Double Foreign Student Intake by 2020,” People’s Daily Online http://english.people.com.cn, August 8,
2006.
55
“Year 2010 to See 100 Mln Foreigners Learning Chinese: Government,” People’s Daily Online
http://english.people.com.cn, September 19, 2006.
56
Juan Forero, “Across Latin America, Mandarin Is in the Air,” Washington Post, September 22, 2006.
57
Sam Dillon, “U.S. Slips in Attracting the World’s Best Students,” The New York Times, December 31, 2004.
52
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many of whom were discouraged from applying to U.S. universities due to the restrictive visa
process.
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While U.S. exchange programs may have a long-term impact on public opinion, some experts
argue that they are overshadowed by China’s official exchanges. China reportedly has been
investing in the “best of the brightest” for recruitment into its increasingly sophisticated
diplomatic corps and lengthening their assignments in order to foster improved language skills,
cultural understanding, and diplomatic effectiveness. One report suggests that in many countries,
PRC diplomats have a busier schedule and are more accessible than their American
counterparts.58 By contrast, since 2005, the U.S. government reportedly has frozen staffing levels
at many diplomatic posts. Budget constraints and the diversion of human resources to Iraq and
Afghanistan have created not only shortfalls in staffing but also cuts in language and other
training.59
After long shunning or passively participating in what it perceived as U.S.-dominated multilateral
organizations, in the past decade, China has joined, taken on more active roles in, and created
new international groupings. In doing so, Beijing has aimed to achieve several key foreign policy
objectives, including enhancing its global stature, defending and promoting its own interests,
constraining the United States, enhancing its “win-win” diplomacy, and creating diplomatic and
economic partnerships and blocs.60 By contrast, the Bush Administration’s appointment of John
Bolton, a long time critic of the United Nations, as the country’s U.N. representative (2005-2006),
was seen by some foreign observers as a rejection of multilateralism.61
China has adopted a more assertive role in the United Nations, the World Bank, the Asian
Development Bank, and other global and regional entities. The PRC has become more engaged
and assertive in the U.N. and deploys a greater number of personnel than the United States to
U.N. peacekeeping missions. However, many analysts argue that some aspects of China’s foreign
policy show a more belligerent and narrowly self-interested outlook, such as Beijing’s rigid
stance on Taiwan and opposition to harsher measures against Sudan. Bilateral initiatives, such as
Friendship and Cooperative Partnership Agreements, Free Trade Agreements, and Strategic
Partnership Agreements, have helped to seal friendships. Finally, China has sought to devise new
multilateral organizations that exclude the United States, such as the East Asia Summit (EAS), the
Shanghai Cooperation Organization (SCO) in Central Asia, the Forum on China-Africa
Cooperation Forum (FOCAC), and the China-Arab Cooperation Forum.
58
Kishore Mahbubani, “Smart Power, Chinese-Style,” The American Interest, March/April 2008; Joshua Kurlantzick,
“China’s Charm Offensive,” Los Angeles Times, June 23, 2007.
59
Karen DeYoung, “U.S. to Cut 10 Percent of Diplomatic Posts Next Year,” Washington Post, December 13, 2007.
60
Goldstein, Avery, Rising to the Challenge: China’s Grand Strategy and International Security, Stanford University
Press, 2005.
61
Michael Fullilove, “China Starts to Pull its Weight at the UN,” International Herald Tribune, August 23, 2006;
“Bush Stands by His Controversial Man,” Economist.com, September 6, 2005.
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Foreign assistance is a fundamental component of the U.S. international affairs budget and is
viewed by many as an essential instrument of U.S. foreign policy. U.S. foreign assistance
programs began in earnest in the mid-1940s with a four-year $13 billion investment in rebuilding
Europe under the Marshall Plan. After the Marshall Plan ended in the early 1950s, much of U.S.
foreign assistance of the 1950s and 1960s was provided to Southeast Asia to counter Soviet and
Chinese influence.
The focus of U.S. foreign aid has changed with different world events and administrations.
Famine relief in Africa and countering insurgencies in Central America were themes during the
1980s. In the 1990s, support of Middle East peace included aid to Israel, Egypt, Jordan, and the
Palestinians. Since the September 11, 2001 terrorist attacks, U.S. assistance programs have taken
on a strategic importance, frequently cast as supporting national security and the global war on
terrorism.
In its FY2009 International Affairs 150 budget the Bush Administration identified the Department
of State and the U.S. Agency for International Development (USAID) as playing critical roles in
implementing the National Security Strategy. At the same time, however, both State and USAID,
according to many foreign policy experts and the Secretary of Defense Robert Gates, have been
lacking in resources for several years: “America’s civilian institutions of diplomacy and
development have been chronically undermanned and underfunded for far too long—relative to
what we traditionally spend on the military and more importantly, relative to the responsibilities
and challenges our nation has around the world.”63 Additionally, the effectiveness of the foreign
policy agencies, particularly USAID, have been hindered by operational changes. Whereas
USAID until recently was comprised of development and country experts, now, according to
some development experts, it has become an agency of contract managers, both in Washington
and overseas, thereby weakening the expertise of the organization.64
Some policy-makers have expressed concern that new initiatives, such as Secretary Rice’s
Transformational Diplomacy and Transformational Development (which place greater emphasis
on U.S. security and democracy-building goals), have taken resources away from traditional aid
programs, particularly in countries that present fewer security threats to the United States or
where governments do not meet various performance criteria. Other agencies and programs, such
as the Department of Defense, the Millennium Challenge Corporation (MCC), and the President’s
Emergency Plan for HIV/AIDS Relief (PEPFAR), also may have diverted funds from core
programs and reduced coordination of U.S. foreign assistance activities, in general. Some analysts
also argue that promoting democracy prematurely in some countries may waste aid or even create
a backlash toward other U.S. programs in that country.65
62
Written by Susan Epstein, Specialist in Foreign Policy.
Secretary of Defense, Robert Gates, speech delivered at the U.S. Global Leadership Campaign, Washington, D.C.,
July 15, 2008.
64
Embassies Grapple to Guide Foreign Aid: A Report to Members of the Committee on Foreign Relations, United
States Senate Committee Print, November 16, 2007.
65
National Endowment for Democracy, The Backlash Against Democracy Assistance, June 8, 2006.
63
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The United States is the world’s largest economic aid donor in dollar terms, but is the smallest
contributor among major donor governments in terms of percent of gross national income. U.S.
foreign assistance generally declined for several decades to an all-time low of 0.14% of national
income in the mid-1990s due to the ending of the Cold War and efforts to balance the federal
budget. In the late 1990s, aid gradually increased to respond to international disasters, such as
Hurricane Mitch in Central America.66 Aid funding increased significantly in the 2000s, largely
due to the wars in Iraq and Afghanistan. See Table 2 and Figure 5. However, although the
amount of spending for international activities has grown significantly since 2001, compared to
changes in the overall size of the federal budget, the share allocated for foreign policy programs
has declined.67 Spending on non-military aid has declined slightly since 2004. See Figure 6.
Table 2. Foreign Operations Appropriations, FY1999-FY2009
($ billion)
Current $
FY08
FY09
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
est.
req.
15.4
16.4
16.3
16.5
23.7
39.1
23.5
23.1
26.4
24.0
26.1
15.4
16.0
15.5
15.5
21.6
34.6
20.0
19.1
21.3
18.9
20.1
Constant
1999 $
Amounts do not include mandatory Foreign Service retirement accounts that total $34.6 million in
FY2009. FY1999 excludes $17.61 billion for replenishing the International Monetary Fund (IMF). All figures
include regular and supplemental appropriations. Figures for FY2008 are Administration estimates. Figures for
FY2009 are requested amounts.
Note:
66
George Bush’s Foreign Aid, Transformation or Chaos? by Carol Lancaster, 2008, p. 11.
With the exception of FY2004 and the $18.45 billion supplemental for Iraq. See CRS Report RL33262, Foreign
Policy Budget Trends: A Thirty-Year Review, by (name redacted).
67
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. Foreign Operations Appropriations, FY1999-FY2009($ Billions)
Figure 5
45
40
35
30
25
20
15
10
5
0
FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
est. req.
Current $
Constant $
Source: The Foreign Operations Congressional Budget Justifications, FY2001 - FY2009 and CRS calculations.
Out of $14.7 billion spent on bilateral and regional aid programs in FY2007, the Middle East was
the largest recipient ($5.1 billion), followed by Africa ($4.7 billion), South and Central Asia ($2.1
billion), Latin America, ($1.5 billion), Europe and Eurasia ($.85 billion), and East Asia and the
Pacific ($0.53 billion).68 See Figure 7.
.S. Foreign Economic Assistance, FY1999-FY2007 ($million)
Figure 6. U
25000
20000
15000
10000
5000
0
FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
Source:
U.S. Department of State
68
U.S. Department of State Congressional Budget Justification for FY2009. The State Department refers to Latin
America and the Carribean as “Western Hemisphere” and the Middle East as “Near East.”
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Figure 7. U.S. Foreign Assistance by Region, FY2007 ($ billion)
East Asia & Pacific .53
Africa 4.7
Europe/Eurasia .855
Middle East 5.1
South and Central Asia 2.1
Latin America 1.5
Source:
U.S. Department of State
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China’s foreign aid is difficult to quantify, due to a lack of official and reliable data. The China
Statistical Yearbook 2003-06 released an annual aid figure of $970 million, but this number likely
does not include loans, which according to some experts is the main form of PRC aid.70
According to one source, annual PRC aid ranges between $1.5 billion-$2 billion.71 When loans
and state-sponsored investment are included, according to one study using unofficial reports of
pledged aid, the PRC promised a total of $31 billion in economic assistance to Southeast Asian,
Latin American, and African countries in 2007, a threefold increase compared to 2005 and 20
times greater than 2003.72 By contrast, the United States’ core official development assistance
(ODA) budget (bilateral development, economic, and security assistance; not including military
and multilateral assistance) was $19.5 billion in FY2007 out of a total foreign operations budget
of $26.4 billion. According to OECD data, the United States’ ODA budget is the largest among
OECD member countries, followed by Japan, the United Kingdom, France, and Germany.
China’s estimated aid levels are comparable to those of Australia, Belgium, or Denmark.73
Another problem with calculating Chinese foreign assistance is that it is often difficult to confirm
when or whether aid and loan pledges were actually disbursed.
69
Written by (name redacted), Specialist in Asian Affairs.
Lancaster; See also Phillip C. Saunders, “China’s Global Activism: Strategy, Drivers, and Tools,” Institute for
National Strategic Studies, National Defense University, 2006.
71
Carol Lancaster, “The Chinese Aid System,” Center for Global Development Essay, June 2007.
http://www.cgdev.org.
72
New York University Wagner School, “Understanding Chinese Foreign Aid: A Look at China’s Development
Assistance to Africa, Southeast Asia, and Latin America,” report prepared for the Congressional Research Service,
April 25, 2008. According to this study, only 3% is grant aid.
73
Organisation for Economic Co-operation and Development (OECD) data. See http://www.globalissues.org/.
70
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The unique characteristics of PRC foreign aid often result in it being overlooked. Like Japan but
unlike most major aid donors, a large portion of Chinese assistance consists of interest-free or
concessional loans—up to 41%—rather than grants, which constitute only 3%, according to one
study.74 Debt forgiveness is also a major form of PRC foreign aid. In addition, China often
extends aid packages that include not only loans but also trade and investment agreements,
largely in the energy sector. According to some analysts, when these kinds of assistance are
added, China becomes one of the largest bilateral aid donors in some countries and regions.
Furthermore, PRC assistance often garners appreciation among foreign leaders and citizens
disproportionate to its costs: (1) China offers assistance without the conditions that Western
donors frequently place on aid (i.e. democratic reform, market opening, and environmental
protection). China’s policy of “non-interference in other countries’ domestic affairs” often wins
international support because it is regarded as respectful of their countries’ sovereignty;75 (2)
Chinese aid does not require a lengthy process involving setting up and meeting social and
environmental safeguards; (3) PRC assistance, often announced at lavish receptions with toasts to
the recipient country’s leaders, carries great symbolic value;76 (4) Many Chinese aid projects,
such as government buildings, infrastructure, hospitals, and energy facilities, often funded by
loans from the China Import-Export Bank and built by Chinese companies, are high profile
efforts with tangible benefits and serve as constant reminders of China’s beneficence; (5) Some
Chinese aid and investment projects reportedly tackle challenging projects that other aid donors
have avoided because of technical difficulties or hardships.
China has taken some tentative steps toward making its foreign aid process more open,
coordinating its projects with other ODA providers, and offering more development-oriented
assistance, while continuing to eschew the label of major ODA donor. Beijing reportedly is
gradually developing an official aid structure and considering creating a unified aid agency. In
2007, the PRC participated in the “Pacific Core Partners Meeting” which included discussions
among ten countries and several multilateral organizations with an interest in reaching a
consensus on goals for development aid in the Southwest Pacific. During the same year, China for
the first time provided aid to Cambodia through an international pledging process. The PRC aid
programs are expanding to include technical assistance, medical assistance, political development
(elections), and food aid. China has begun sending “youth volunteers,” similar to U.S. Peace
Corps volunteers, engaged in Chinese language instruction, computer skills, agricultural and
poultry technologies, sports and music training, and traditional Chinese medicine.77
74
New York University, op. cit.
China’s conditions on aid are often international rather than domestic—requiring aid recipients to support the “oneChina” principle regarding Taiwan and China’s agenda in the United Nations or to use Chinese companies and workers
in the development of aid projects.
76
Jane Perlez, “China Competes with West in Aid to its Neighbors,” The New York Times, September 18, 2006.
77
China reportedly has volunteers in 50 countries, mostly in Africa and Southeast Asia, and has begun to send
volunteers to Latin America. The Chinese government has pledged to send 300 volunteers to Africa by 2009. “China to
Send Youth Volunteers to Africa this Year,” The Ethiopian Herald, February 17, 2007.
75
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Although public perceptions of the United States and China vary widely within regions and are
sensitive to current events, some public opinion studies point to a significant decline for the
United States after 2002. A comparison of surveys conducted in 2002 and 2007 by the Pew
Research Center shows that images of the United States declined in 26 of 33 countries.79 In a
2005 Pew 16-nation survey, images of the United States had improved somewhat from its low
point following the invasion of Iraq in 2003, but its favorability rating still placed it last among
five major powers—Germany, France, Japan, and China.80 In a 2006 Harris Poll, among
European countries, the United States was viewed as the greatest threat to global stability,
followed by Iran and China.81
Although positive attitudes toward China have declined somewhat in the past few years, the
PRC’s image is regarded as “decidedly favorable” in 27 of 47 nations surveyed by Pew in 2007.
These responses reflect a view of China’s economic influence as largely positive, especially
among developing countries that do not compete directly with China. However, concerns about
China’s military strength are evident in Europe, Japan, and South Korea.82 Western European
nations have become increasingly critical of China’s role in the world. In a 2008 Harris Poll,
among major European countries, China has overtaken the United States as the “biggest threat to
global stability.”83 Some observers argue that China’s self-cultivated image of “peaceful
development” may have been marred by reports of the PRC police crackdown in Tibet and
Chinese foreign students attacking human rights demonstrators in Seoul, South Korea during the
Olympic torch relay there.84
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This section discusses two aspects of the PRC’s military diplomacy for comparison with U.S.
spending: training foreign militaries and participating in peacekeeping. For many years, China
has used military training to support arms sales as well as the diplomacy that is conducted by the
military, collectively called the People’s Liberation Army (PLA). China also has highlighted its
role in United Nations (UN) peacekeeping to boost its diplomatic image and contend that the
PRC is a cooperative country in international security and a responsible permanent member of the
U.N. Security Council. China is not as transparent as the United States in publishing its military
spending and deployment information, and PRC official media report vague and selective
78
Written by (name redacted), Specialist in Asian Affairs.
The Pew Global Attitudes Project, “Global Unease with Major Powers,” June 27, 2007.
80
The United States received a favorability rating of 50% or above from six countries, China from 11 countries, and
Germany, France, and Japan from 13 out of 16 countries. American Character Gets Mixed Reviews: U.S. Image Up
Slightly, but Still Negative, Pew Research Center, June 23, 2005.
81
“Plurality of Public in Five Major European Countries Continues to See the U.S., over Five other Countries, as the
Greatest Threat to Global Stability,” http://www.harrisinteractive.com, August 30, 2006.
82
The Pew Global Attitudes Project, “Global Unease with Major Powers,” June 27, 2007.
83
Ben Hall and Geoff Dyer, “China Seen as Biggest Threat to Security,” [FT.Com], April 15, 2008.
84
Kurt Achin, “Massive Chinese Crowds Overwhelm Olympic Torch Protests in South Korea,” VOANEWS.COM,
April 27, 2008.
85
Written by Shirley Kan, Specialist in Asian Security Affairs.
79
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information about the PLA’s foreign contacts. Nevertheless, some funding data about the PLA’s
role in peacekeeping operations has been objectively reported by the UN.
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The PRC’s defense budget can be used as one indicator of the priority placed on the
modernization of its military, collectively called the People’s Liberation Army (PLA). On March
4, 2008, the PRC announced its military budget for 2008 that totaled 417.8 billion yuan (US$58.8
billion), claiming a 17.6 percent increase over last year’s military budget. Actually, the newly
announced 2008 budget is an increase of 19.1 percent over last year’s announced budget (vs
actual budget). Using the PRC’s own announced military budgets, the 2008 budget is a doubling
of the 2004 budget. This trend of double-digit percentage increases has persisted for years.
Nominally, China has raised its announced military budget by double-digit percentage increases
every year since 1989. After the Taiwan Strait Crisis of 1995-1996, China’s announced military
budget has increased in real terms (accounting for inflation) every year, including real doubledigit percentage increases every year since 1998. China’s military budget is the highest in Asia.
In comparison, the U.S. base defense budget (for Defense Department activities other than the
ongoing military operations in Afghanistan and Iraq) for FY2008 totaled $460.3 billion, as
provided by the FY2008 Defense Appropriations Act (P.L. 110-116).86
The Defense Department estimates that China’s total military expenditures is greater than the
military budget as officially announced. The Secretary of Defense’s 2008 report to Congress on
PRC military power estimated that China’s total defense-related spending for 2007 could be $97139 billion, about two to three times the announced military budget.87
In comparison, total U.S. spending for national defense in FY2007 (including base budget for the
Defense Department, war-related funding, related funding for the Energy Department, and related
intelligence and homeland security spending) totaled $528.6 billion.88
The following graph (Figure 8) depicts the increase in military budgets as announced by China.
86
CRS Report RL33999, Defense: FY2008 Authorization and Appropriations, by (name redacted), (name redacted), and
(name redacted).
87
Secretary of Defense, “Annual Report to Congress: Military Power of the People’s Republic of China 2008,” March
3, 2008.
88
CRS Report RL33999, Defense: FY2008 Authorization and Appropriations, by (name redacted), (name redacted), and
(name redacted).
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Figure 8. PRC’s Announced Military Budgets, 1991-2008
480
450
420
390
360
330
300
270
240
210
180
150
120
90
60
30
0
1991 199 2 1993 1994 1995 1996 1997 1998 1 999 2000 2001 2002 2003 2004 200 5 2006 2007 2008
Billions of RMB
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The PLA has extended training to foreign militaries, mostly of developing countries. For decades,
military training has been conducted in support of China’s arms sales or transfers. From 1999 to
2006, China ranked 5th among the leading suppliers of weapons to developing countries (behind
the United States, Russia, United Kingdom, and France). The value of China’s arms deliveries
during the eight-year period totaled $5.8 billion. (The value of U.S. arms deliveries to developing
countries in the same period totaled $61.1 billion.)89 For example, in the 1980s and 1990s, the
PLA Navy trained Pakistan’s and Bangladesh’s naval officers to maintain frigates and torpedo
boats from China. In Africa, the PLA trained air force pilots of Zimbabwe to fly F-7 fighters and
to operate air defense systems supplied by the PRC.90 During a visit to the Philippines in
September 2007, PRC Defense Minister Cao Gangchuan offered a grant worth $6.6 million to the
military for non-lethal military equipment, construction machinery, Chinese-language training,
participation in naval exercises in China, and military courses in Beijing. At the same time, China
sought to sell at a discount eight Z-9 utility helicopters to the Philippines’ army.91 In 2004, China
provided a preferential loan to Cambodia for the purchase of seven patrol boats, one landing ship,
and one floating dock, worth a total of $60 million. At the handover ceremony in November 2007
89
CRS Report RL34187, Conventional Arms Transfers to Developing Nations, 1999-2006, by (name redacted).
Kenneth Allen and Eric McVadon, China’s Foreign Military Relations (Stimson Center, 1999).
91
Noel Tarrazona, “U.S., China Vie for Philippines Influence,” Asia Times, September 19, 2007.
90
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attended by China’s ambassador, an executive of the China State Shipbuilding Corporation cited
further cooperation with Cambodia, involving personnel training, maintenance, and spare parts.92
Additionally, training for foreign militaries has been conducted at the PLA’s National Defense
University (NDU) in Beijing in part to enhance friendly ties with foreign militaries, sometimes
with scholarships. At the end of 2006, the PRC government reported that various PLA educational
institutions in China hosted more than 2,000 military students from over 140 countries.93
However, the PLA’s primary objective in offering training in China to foreign militaries is not to
build personal or cultural rapport and relationships between PLA and foreign military officers. At
the NDU, classrooms for foreign military officers are located in a secondary campus, and foreign
students are separated from PLA students. Even officers from Zimbabwe complained about
isolation from and lack of interaction from PLA officers. Some countries have refused to conduct
exchanges unless foreign students are integrated with PLA students on a reciprocal basis at the
PLA’s NDU.94
In contrast, the U.S. International Military Education and Training (IMET) program seeks to
increase mutual understanding and defense cooperation; support combined operations with the
U.S. military; and promote democratic values and human rights. In particular, IMET helps to
develop professional and personal relationships that provide U.S. access to and influence in
foreign militaries as the critical actors in transitions to democracies.95
In reporting training as part of building bilateral military relationships, the PLA has increasingly
stressed China’s cooperative attitude in international security, particularly non-traditional security
problems like counter-terrorism, humanitarian assistance, and disaster relief. In July 2007, a PLA
training base in the southern city of Guangzhou held an exercise with Thailand’s special forces,
training to counter violent international drug smugglers.96 A report in Jakarta in early 2008 said
that China offered training and education for 23 military officers from Indonesia plus a seminar in
China on international disaster relief for two Indonesian officers among others from the
Association for South East Asian Nations (ASEAN).97 In April 2008, the PLA’s University of
Science and Technology in Nanjing conducted the first de-mining course to train military officers
from Sudan, to show China’s support for that country’s reconciliation.98
In Asia, the PLA has extended military training to Cambodia. In 2003, coinciding with a visit by
the PLA Chief of General Staff, media in Phnom Penh reported rare information on the PLA’s
military aid, saying that China provided $3 million annually to Cambodia for military training.99
In addition to Cambodia, media reports have quoted senior PLA officers as mentioning vague
training for the militaries of Pakistan, Vietnam, Indonesia, Singapore, Bangladesh, Mongolia, and
92
“Chinese Ship-building Company Delivers Marine Equipment to Cambodia,” Xinhua, November 7, 2007.
PRC State Council, “China’s National Defense in 2006,” published by Xinhua on December 29, 2006.
94
Consultation with U.S. observers of PLA educational exchanges; and Kenneth Allen and Eric McVadon, China’s
Foreign Military Relations, (Stimson Center, 1999).
95
Department of State, “Foreign Military Training: Joint Report to Congress, Fiscal Years 2006 and 2007,” August
2007.
96
Jiefangjun Bao, July 23, 2007; Nanfang Ribao, July 24, 2007; Guangzhou Ribao, July 30, 2007.
97
Antara, January 9, 2008.
98
Xinhua, April 7, 2008.
99
Agence Kampuchea Presse, November 24, 2003.
93
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the Philippines.100 China has provided military training for the forces of the junta ruling Burma.
In the case of Thailand, China has proceeded to enhance military assistance, including training, in
spite of the military coup in Bangkok in September 2006 and in contrast to U.S. concerns. In
January 2007, the PLA hosted the Thai Army Commander-in-Chief who led the coup that ousted
the prime minister and offered military aid and training worth $49 million to the Thai military.101
In Central and South America, where a number of countries still recognize the Republic of China
(commonly called Taiwan), the PLA reportedly has provided training for the militaries of various
countries, including Surinam, Argentina, Guyana, Venezuela, Cuba, and Brazil. An increasing
number of officers from Latin American militaries have attended PLA academies.102 In August
2007, the NDU in Beijing hosted the Third Latin American Senior Officer Symposium and the
First Symposium of Senior Defense Officers from the Caribbean and South Pacific.103
In Africa since 2006, China has stepped up its civilian engagement and military training after a
visit by Foreign Minister Li Zhaoxing in January 2006 and a China-African summit of the Forum
on China-Africa Cooperation (FOCAC) in November 2006.104 Heads of state or government from
41 African countries attended the summit in Beijing. Reportedly at times with scholarships and in
support of arms sales or supplies, the PLA reportedly has trained personnel from the militaries of
countries that include Egypt, Sudan, Zimbabwe, Chad, Madagascar, Guinea, Morocco, Rwanda,
Zambia, Nigeria, Benin, Cameroon, Sierra Leone, Ethiopia, Eritrea, Lesotho, and Namibia. In
addition, the press in Kinshasa reported in early 2006 that 83 military officers from the
Democratic Republic of the Congo were studying at that time in PLA military academies.105
At the same time that the Beijing government touted training for foreign military students, it cited
greater expenses for international cooperation as one of the reasons for China’s increased military
budget, in a report issued at the end of 2006.106 However, China’s defense budget lacks detailed
clarity and transparency, and accounts for only part of total military-related spending. In a more
detailed discussion of China’s military spending in Beijing held in November 2006, just before
the release of the PRC government’s report, U.S. specialists found that the PLA’s foreign
assistance is covered by inter-agency funds from other ministries.107
In contrast, U.S. military assistance is reported annually in the State Department’s request to
Congress for funding the budget for international affairs. Military assistance includes three
categories of International Military Education and Training (IMET), Foreign Military Financing
(FMF), and Peacekeeping Operations (PKO). See Table 3. According to the budget justifications,
the United States funded military assistance in the amounts shown in this table since FY2001.
The IMET programs trains roughly 10,000 foreign military students per year from over 130
100
Numerous PRC official and non-PRC media report vague and limited mentions of the PLA’s “military training” or
“cooperation” with foreign militaries and are available upon request to this author.
101
“China and Thailand to Strengthen Army Ties,” Thai News Agency, January 23, 2007; Kavi Chongkittavorn, “PostCoup Thailand in the Eyes of the U.S. and China,” Nation, February 12, 2007.
102
Loro Horta, “China on the March in Latin America,” Asia Times, June 27, 2007.
103
Jiefangjun Bao, August 17, 2007.
104
Chua Chin Hon, “China Sets Out to Build on Ties with Africa,” Straits Times, January 13, 2006; and “Action Plan
Adopted at China-Africa Summit, Mapping Cooperation Course,” Xinhua, November 5, 2006.
105
“China Offers 20,000 Uniforms to FARDC,” L’Observateur, January 20, 2006.
106
PRC State Council, “China’s National Defense in 2006,” published by Xinhua on December 29, 2006.
107
U.S.-China Policy Foundation, “Defense-Related Spending in China,” May 2007.
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countries, with the largest totals coming from Europe/Eurasia and the Western Hemisphere (Latin
America and the Caribbean).
. U.S. Military Assistance: Actual Funding
Table 3
($ million)
IMET
FMF
PKO
Totals
Source:
FY
FY
FY
FY
FY
FY
FY
2001
2002
2003
2004
2005
2006
2007
57.8
3,568.4
126.7
3,752.9
70.0
4,052.0
375.0
4,497.0
79.5
5,991.6
214.3
6,285.4
91.2
4,621.8
124.5
4,837.5
89.0
4,995.2
547.6
5,631.8
85.9
4,464.9
173.3
4,724.1
85.9
4,560.8
223.3
4,870.0
State Department, International Affairs Function 150, budget requests for each fiscal year.
ȱȱ
China shunned participation in U.N. peacekeeping operations until a policy change in 1988, in
part because of opposition to what China called military intervention in the name of the U.N. in
the internal affairs of other countries. The PLA first participated in a U.N. peacekeeping mission
by sending military observers to the Middle East in 1990. By 2000, China was deploying about
650 personnel in 10 U.N. peacekeeping missions. By late 2007, China’s personnel at U.N.
peacekeeping operations totaled 1,819.108
However, despite the rising numbers of deployed personnel in foreign countries, the PLA’s
“peacekeeping” in the 1990s was mainly in sending military observers, not troops or police.109
The PRC Government’s late 2006 report stressed the PLA’s participation in U.N. peacekeeping
operations, reporting that since 1990, China had sent a total of 5,915 military personnel to join 16
U.N. peacekeeping operations. However, the breakdown of types of personnel showed that they
were not combat troops who maintained security. In late 2006, the total of 1,487 PLA
“peacekeepers” were mainly military observers and staff officers, engineers, medical personnel,
and transportation personnel. There also were 180 police in peacekeeping missions.110 Some U.S.
observers have suspected that the PLA’s “peacekeepers” collected intelligence on foreign
militaries and focused on protecting China’s economic, including energy, investments or
facilities.
Particularly since 2006, the PRC has touted its participation in U.N. peacekeeping, as part of its
claimed “leading” role in international peace and security. In 2006, the PLA claimed that it was
the largest contributor to U.N. peacekeeping operations among the five permanent members of
the U.N. Security Council, and the Washington Post boosted China as “quietly extending its
influence on the world stage through the support of international peacekeeping operations.”111
However, China’s argument about its role as the largest participant in peacekeeping among the
108
China Daily, November 21, 2007.
Kenneth Allen and Eric McVadon, China’s Foreign Military Relations, (Stimson Center, 1999).
110
PRC State Council, “China’s National Defense in 2006,” published by Xinhua on December 29, 2006.
111
“China is the Largest UNSC Contributor to Peacekeeping Missions,” Xinhua, September 28, 2006; Colum Lynch,
“China Filling Void Left By West in U.N. Peacekeeping,” Washington Post, November 24, 2006.
109
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five permanent members of the U.N. Security Council failed to take into account the various
critical roles in maintaining international security played by the U.S. and European militaries
outside of U.N. peacekeeping.
Despite its expansion of peacekeeping deployments, PRC influence exerted through
peacekeeping has been limited. PRC personnel have included, since 2004, police officers
(currently numbering 134) at the U.N. peacekeeping mission in Haiti. However, while this
deployment raised a concern that Beijing would use its influence for diplomatic recognition, Haiti
still maintains a diplomatic relationship with the Republic of China in Taipei (commonly called
Taiwan). In 2007, China agreed to send PLA troops as U.N. “peacekeepers” to Darfur to deflect
criticism of China’s failure to help the humanitarian crisis in Sudan and the Beijing Olympic
Games as the “Genocide Olympics.” But the PLA sent 315 engineers to build barracks and other
construction projects. In testimony in June 2008, Deputy Assistant Secretary for East Asian and
Pacific Affairs Tom Christensen criticizing China for not doing more in Sudan. He said that while
China has become more involved in addressing the humanitarian crisis in Sudan, Sudan’s
government continues to use violence against civilians and rebels in Darfur, and renege on key
elements of deployment of the United Nations African Mission in Darfur (UNAMID).112 In the
same month, top PRC ruler Hu Jintao continued to have to urge Sudan, during a visit of its vice
president, to fulfill its commitments on the deployment of the peacekeeping force and achieve
peaceful conditions in Darfur.113
As of April 2008, China ranked 12th in the number of military and police personnel participating
in U.N. peacekeeping operations, with 1,981 personnel in total in 12 U.N. missions. In
comparison, the United States ranked 43rd, contributing 300 personnel. The top ten contributing
countries to U.N. peacekeeping operations are: Pakistan, Bangladesh, India, Nigeria, Nepal,
Ghana, Jordan, Rwanda, Italy, and Uruguay.114
However, while China increasingly has touted the increasing numbers of its personnel in
peacekeeping, China has not highlighted the relatively limited funding it has provided to the U.N.
for peacekeeping. The top ten contributors of funding for U.N. peacekeeping are: United States,
Japan, Germany, United Kingdom, France, Italy, China, Canada, Spain, and South Korea.115
While the United States leads with the highest contribution to the U.N. peacekeeping budget,
providing 26 percent of assessed contributions, China provides 3 percent of assessed
contributions. Even at this low level of contribution for the world’s fastest growing economy, a
PRC diplomat at the U.N. complained in late 2007 about the “financial burden” for China when
its required assessments, including for peacekeeping, increased 42 percent from 2006 to 2007.116
In 2007, China contributed $190.6 million for U.N. peacekeeping operations, while the United
States contributed $1.2 billion.117
112
Senate Foreign Relations Subcommittee on African Affairs, hearing on China in Africa, June 4, 2008.
Xinhua and Sudan Tribune, June 11, 2008.
114
United Nations, “Ranking of Military and Police Contributions to U.N. Operations,” April 30, 2008.
115
United Nations, “United Nations Peacekeeping Fact Sheet,” February 2008.
116
Yu Hong, PRC Representative to the Fifth Committee of the 62nd General Assembly, on Agenda Item 119,
“Improve the Financial Situation of the UN,” United Nations, New York, November 15, 2007.
117
United Nations, Spokesman’s internal reference, “2008 Status of Contributions to the Regular Budget, International
Tribunals, Peacekeeping Operations, and Capital Master Plan.”
113
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For China, international trade is playing a key role in increasing its influence around the world
and in enabling the country to import the technology, resources, food, and consumer goods
needed to support its economic growth, to finance the other aspects of its national power, and to
maintain the legitimacy of the Communist Party government. The access that China has to
foreign markets also has enabled it to attract foreign investment. These foreign-affiliated
companies not only play a key role in generating economic growth and employment but in the
manufacture of world-class products that account for more than half of China’s exports. China is
now the third largest trading nation in the world (after the United States and Germany), and its
commercial interaction is having a major effect both on trading partners and on China’s own
economy.
International trade differs from diplomacy, foreign aid, military exchanges, and other bilateral
interaction that requires explicit government action and funding. Trade is largely self-motivated
and self-generated, and the financial rewards are captured largely by private producers and
consumers along with the chain of service providers who facilitate the transactions. Governments,
however, benefit from the international trade transactions through tariff and tax revenues,
economic growth, increased economic efficiency, and a generally higher standard of living for
residents. Government policy also influences trade flows either in a negative (e.g., protectionism)
or positive (e.g., trade promotion) manner.
International trade and financial transactions, moreover, generate spillover effects, that carry over
into political and security ties among nations. Trade also can be used as a weapon (as with trade
sanctions) or it can be used to create interdependencies that may ameliorate hostile interactions or
induce countries to take favorable political actions. Trade additionally creates interest groups
within the trading countries who value stability and abhor political disruptions to their
commercial transactions.
Academic studies have shown that among nations, the greater the interdependence (the greater the
costs of exiting from an economic relationship), the greater the probability that the nations will
not seek political demands that could lead to conflict. On the other hand, economic
interdependence also can be used as leverage to bolster political demands.119 Also, the greater the
extent that internationally oriented coalitions in a country (actors with interest in expanding
foreign markets or in importing) have political clout, the more likely that outside, economic
incentives or sanctions will be effective in influencing policy in the country in question.120
In addition, economic studies indicate that the expectation of future commercial gains between
nations helps to dampen political tensions and deter the onset of hostilities. Such future gains are
enhanced by preferential trading arrangements, such as free trade agreements (FTAs).
Membership in preferential trading arrangements tends to inhibit interstate conflict.121 Economic
118
Written by (name redacted), Specialist in Industry and Trade.
See, for example: Crescenzi, Mark J. C. Economic Interdependence and Conflict in World Politics (Lanham, MD,
Lexington Books, 2005) p. 6.
120
Papayoanou, Paul A. And Scott L. Kastner, “Sleeping With the (Potential) Enemy: Assessing the U.S. Policy of
Engagement with China,” in Jean-Marc F. Blanchard, Edward D. Mansfield, and Norrin M. Ripsman, Power and the
Purse, Economic Statecraft, Interdependence, and National Security (Portland, OR, Frank Cass, 2000) p. 159ff.
121
Copeland, Dale C. “Trade Expectations and the Outbreak of Peace: Dètente 1970-74 and the End of the Cold War
(continued...)
119
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interaction also increases opportunities for international communication, establishing personal
ties between people, and cooperating in diplomatic endeavors. This reduces the chances for
miscalculations and misperceptions and increases the chances for direct diplomacy and backchannel communications. On the other hand, economic arrangements may increase competition
for domestic industries and invite blowback from sectors hurt by increased trade liberalization.
China has taken an aggressive stance toward establishing FTAs with trading partners. It has
concluded a highly publicized FTA with the Association of South East Asian Nations that would
create a zero-tariff market for China and the six early ASEAN members (Indonesia, Singapore,
Thailand, Philippines, Malaysia, and Brunei) by 2010 and for the other four members (Vietnam,
Cambodia, Laos, and Burma/Myanmar) by 2015. This included an early harvest program that
eliminated tariffs on goods immediately, and in 2007 a further agreement brought services under
the FTA. China also has FTAs with Hong Kong, Macao, New Zealand, and Chile. It is negotiating
with or having pre-negotiation discussions with about two dozen other countries including
Australia, South Korea, Pakistan, Peru, Iceland, Switzerland, the Gulf Countries, and the
Southern Africa Customs Union.
The United States also has been actively concluding free trade deals. It has FTAs in force or
pending implementation with Israel, Canada, Mexico, Jordan, Chile, Singapore, Australia,
Morocco, Bahrain, Peru, and Oman, plus FTAs with Panama and South Korea awaiting
legislative approval. Negotiations have begun for FTAs with Malaysia, Thailand, and the
Southern Africa Customs Union.
A difference between China and the United States is that China tends to avoid insisting upon
controversial or intrusive provisions in its FTAs, whereas the United States usually attempts to
negotiate according to a “gold standard template” for its agreements. This high standard usually
requires the partner country to open markets long protected for domestic political purposes or to
enact legislation, such as greater protection of intellectual property, that may be politically
difficult. As a result, China’s FTAs usually engender less resistance and tend to result in
considerable good will in the partner country—even if the FTA provides only for partial market
opening. FTA negotiations with the United States, on the other hand, often trigger political
opposition in the potential FTA partner country. Such political opposition, along with other
developments, have hindered FTA talks with Thailand and Malaysia. Negotiations on the KoreaU.S. FTA were concluded despite demonstrations against it in South Korea, but the agreement is
awaiting formal approval by each country.
Rapid economic growth in China combined with a population (1.3 billion people) that is larger
than North America and Europe combined has generated soaring demand for food, energy, and
minerals as well as business equipment, and consumer goods typical of a newly industrializing
nation. Chinese and other multinational corporations have established global supply chains that
both feed the Chinese economic juggernaut and carry its manufactured goods to world markets.
In recent years, Beijing has focused particularly on securing stable supplies of petroleum and
other raw materials. It has combined its huge purchasing power with funds for overseas direct
investments and economic assistance to develop supply lines and long-term contracts to ensure
(...continued)
1985-91,” p. 93 and Edward D. Mansfield, Jon C. Pevehouse, and David H. Bearce, “Preferential Trading
Arrangements and Military Disputes,” p. 16, both in Jean-Marc F. Blanchard, Edward D. Mansfield, and Norrin M.
Ripsman, Power and the Purse, Economic Statecraft, Interdependence, and National Security (Portland, OR, Frank
Cass, 2000) 343 p.
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deliveries of needed industrial and consumer inputs. In some cases, these efforts have occurred in
countries or with autocratic regimes, such as those in Africa, that are considered anathema to
other nations. (These issues are discussed in more detail elsewhere in this memorandum.)
This section on international trade provides an overview of China’s international trade in goods
with comparisons to that of the United States. It shows that both nations are major traders, but
that China has surpassed the United States in total exports. Both nations trade the most heavily
with the rich, industrialized nations of the world. China, however, also trades with many countries
under various U.S. sanctions. In 2007, for example, China imported mineral fuel from the Sudan
and Iran while the United States did not. China also has more trade overall with Cuba, North
Korea, and Burma/Myanmar.
Since the comparisons of this section are between the United States and China, trade between the
two countries is not addressed. China’s emergence as a world trade power has both positive and
negative effects on the United States. In 2007, China was the largest source of U.S. imports ($322
billion), the third largest market for U.S. exports ($65 billion), and the country with which the
United States has the largest merchandise trade deficit ($256 billion). Low cost imports from
China have helped moderate inflation in the United States but at the same time have applied
intense competitive pressures on certain U.S. industries making similar products.
As shown in Figure 9, the total trade (exports plus imports) in merchandise of the United States
exceeds that of China. While both have been growing in nominal terms—no adjustment for
inflation—the trade of China has been catching up with that of the United States. In 1995, U.S.
total trade was $1,390 billion or five times that of China’s $281 billion. By 2007, U.S. total trade
of $3,116 billion was only 1.4 times that of China’s $2,175 billion.
.Total Trade (Exports + Imports) for China and the United States and the
Ratio of Total Trade of the United States to That of China
Figure 9
China Total Trade
3500
U.S. Total Trade
Ratio of U.S./China
Ratio
$Billion
7
3000
6
2500
5
2000
4
1500
3
1000
2
500
1
0
0
95 96 97 98 99 2000 1
2
3
4
5
6
7
281 290 325 324 361 474 510 621 851 1155 1422 1760 2175
China Total Trade
U.S. Total Trade 1390 1440 1586 1625 1803 2106 1976 1959 2101 2433 2737 3064 3116
5
5
4.9
5
5
4.4
3.9
3.2
2.5
2.1
1.9
1.7
1.4
Ratio of U.S./China
Year
Source:
United Nations, COMTRADE Database.
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China, therefore, has become a major trading nation and a competitive rival to the United States
in certain industries. The two countries compete, not only in third country economies but also in
each other’s home markets. Given the rise of globalized supply chains, however, China’s
economy also complements that of the United States in certain areas. U.S. companies may rely on
China to manufacture products designed, advertised, and distributed by the American-based part
of the multinational corporation, or they may manufacture in the United States using Chinese
components. On a global scale, China now ranks second only to the European Union (EU, extraEU trade only) in total merchandise exports and third after the United States and the EU in
imports. Japan and Canada hold fourth and fifth places in both exports and imports,
respectively.122
A projection by Global Insight, an econometric consulting firm, indicates that by around 2011,
total trade in goods by China may exceed that of the United States. (See Figure 10.) By 2020, the
total trade of China could reach nearly double that of the United States. These econometric
projections are based on forecasts of economic growth rates for China of an average of 10.2%
from 2006-2010 and about 7.4% for the following decade. For the United States, the projected
growth rates are at around 2.5% per year.
An implication of these trends in trade is that China’s presence in the international marketplace is
likely to continue to grow. China’s imports, in particular, are projected to continue to increase and
to reach the level of its exports at around 2010. At that time, China’s trading partners may be
relying more on China than on the United States both as a market for exports and source of
imports.
. Projections for Total Trade (Exports plus Imports) in Merchandise for the
United States and China to 2020
Figure 10
14
$Trillion (Nominal)
12
Actual
Projections
10
China
8
6
4
U.S.
2
0
2000 1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20
Year
Source: Projections by Global Insight
122
World Trade Organization. “World Trade 2007, Prospects for 2008,” 2008 Press Release 520, April 17, 2008.
http://www.wto.org/english/news_e/pres08_e/pr520_e.htm.
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Figure 11 shows U.S. and Chinese total trade with selected major trading partners in 2007. The
United States traded more than did China with its neighboring countries of Canada and Mexico as
well as with Brazil and Venezuela. Likewise China traded more with its neighbors Hong Kong,
Japan, South Korea, Russia, and Taiwan than did the United States. With the European countries
of Germany, the UK, France, and the Netherlands, U.S. total trade exceeded that of China.
s Total Trade in Goods (Exports + Imports) in 2007 with
Selected Major Trading Partners
Figure 11. U.S. and China’
$billion
30.3
Canada
561.5
15
Mexico
347.3
236
208.1
197.1
Japan
Hong Kong
27.2
94.2
Germany
144
39.4
United Kingdom
107.2
160.2
Korea, South
82.3
33.7
69
France
124.5
Taiwan
64.7
48.1
26.7
47.2
44.7
46.3
51.4
29.7
50.3
5.8
50.1
Russia
Singapore
Netherlands
Brazil
Venezuela
0
100
China Total Trade
U.S. Total Trade
200
300
400
500
600
700
Trading Partner
Source:
Data from Global Trade Atlas
In 2007, the value of China’s exports of merchandise surpassed those of the United States. As
shown in Figure 12, whereas in 1995, U.S. exports at $620 billion were more than four times the
$149 billion exports from China, in 2007, China’s exports at $1,218 billion exceeded the $1,163
billion from the United States.
It should be noted that more than half of the exports of merchandise from China originate from
foreign invested enterprises. These are products of multinational corporations based primarily in
the United States, Japan, South Korea, and Europe that manufacture products designed and
marketed to industrialized societies around the world.
As for imports, as shown in Figure 13, in 2007, U.S. imports at $1.954 billion amounted to more
than twice China’s total of $956 billion. In 1995, however, the United States imported nearly six
times as much as did China. China’s imports are rising fast. China’s economy is not only
consuming more imports, but its demand for imports is being added to that from other
industrializing nations of the world for products such as petroleum, copper, and soybeans. This
rise in demand is considered to be one cause for the recent rise in world commodity prices.
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Figure 12. U.S. and China’s Exports of Goods to the World
1400
$Billion
1200
U.S.
Exports
1000
800
China
Exports
600
400
200
0
China Exports
U.S. Exports
95
96
97
98
99 2000 1
2
3
4
149
620
151
623
183
688
184
680
195
743
326
757
438
796
593 762 969 1218
908 1005 1148 1163
249
848
266
796
5
6
7
Year
Source:
United Nations, COMTRADE Database.
e Imports of Goods From the World
Figure 13. U.S. and Chines
2500
$Billion
U.S.
Imports
2000
1500
China
Imports
1000
500
0
China Imports
U.S.
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