# Comparing Global Influence: China’s and U.S. Diplomacy, Foreign Aid, Trade, and Investment in the Developing World > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3ARL34620 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** August 15, 2008 - **Citation:** RL34620 ## Text ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽDZȱ‘’—ŠȂœȱŠ—ȱ ǯǯȱ’™•˜–ŠŒ¢ǰȱ˜›Ž’—ȱ’ǰȱ›ŠŽǰȱŠ—ȱ —ŸŽœ–Ž—ȱ’—ȱ‘ŽȱŽŸŽ•˜™’—ȱ˜›•ȱ ‘˜–Šœȱž–ǰȱ˜˜›’—Š˜›ȱ ™ŽŒ’Š•’œȱ’—ȱœ’Š—ȱŠ’›œȱ žžœȱŗśǰȱŘŖŖŞȱ ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŝȬśŝŖŖȱ ǯŒ›œǯ˜Ÿȱ řŚŜŘŖȱ ȱŽ™˜›ȱ˜›ȱ˜—›Žœœ Prepared for Members and Committees of Congress ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ž––Š›¢ȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ ˜—Ž—œȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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 ’ž›Žœȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ Š‹•Žœȱ 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 ˜—ŠŒœȱ Author Contact Information ........................................................................................................ 147 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ ȱDZȱ ȱ —›˜žŒ’˜—ŗȱ 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. ˜—›Šœ’—ȱ’™•˜–Š’Œȱ¢•Žœȱ 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. ‘’—ŠȂœȱŒ˜—˜–’Œȱ›ŠŒ’ŸŽ—Žœœȱ 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. 2 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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. ȱŠ—ȱǯǯȱ˜ȱ˜ Ž›ȱ’—ȱ’ŸŽȱŽ’˜—œȱ 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. ’™•˜–ŠŒ¢ȱ 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. 6 The U.S. State Department refers to the Latin America and the Carribean region as Western Hemisphere. 5 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ Řȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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 ˜›Ž’—ȱœœ’œŠ—ŒŽȱ 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). ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ řȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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. ȱǯǯȱŽœž›Ž—ŒŽǵȱ 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...) ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ Śȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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 ˜›Ž’—ȱ˜•’Œ¢ȱ —Ž›ŽœœȱŠ—ȱ –™•Ž–Ž—œȱ˜ȱ˜ Ž›ŗřȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ śȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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 ‘Žȱ˜œȬ˜•ȱŠ›ȱ —Ž›•žŽȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ Ŝȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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 ‘Žȱ‘’—Šȱ˜Ž•ǵȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŝȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ 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...) ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ Şȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ şȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ –™•’ŒŠ’˜—œȱ˜›ȱ‘Žȱ—’ŽȱŠŽœȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗŖȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗŗȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ 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...) ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗŘȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ 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 —œ›ž–Ž—œȱ˜ȱ Š›ȱŠ—ȱ˜ȱ˜ Ž›ȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗřȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗŚȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗśȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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. œœŽœœ’—ȱ‘’—ŠȂœȱ˜ȱ˜ Ž›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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗŜȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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. ’–’Š’˜—œȱ˜—ȱ‘’—ŽœŽȱ˜ȱ˜ Ž›ȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗŝȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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. ȱDZȱ ȱȱǯǯȱȱȱ ȱȱ ȱȱȱȱ ’™•˜–ŠŒ¢ȱŠ—ȱ˜›Ž’—ȱœœ’œŠ—ŒŽȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗŞȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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. ǯǯȱž‹•’Œȱ’™•˜–ŠŒ¢Śśȱ 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. ŠŒ”›˜ž—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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŗşȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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. ǯǯȱžŒŠ’˜—Š•ȱŠ—ȱž•ž›Š•ȱ¡Œ‘Š—Žȱ›˜›Š–œȱ 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. ž—’—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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŘŖȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ 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.” ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ Řŗȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŘŘȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ˜—žŒ’žœȱ —œ’žŽœȱŠ—ȱŠ—žŠŽȱ›Š’—’—śŗȱ 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 ˜›Ž’—ȱžŽ—œȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ Řřȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ many of whom were discouraged from applying to U.S. universities due to the restrictive visa process. ŠŽȱ’™•˜–ŠŒ¢ȱ 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. ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŘŚȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ǯǯȱ˜›Ž’—ȱ’ŜŘȱ ŠŒ”›˜ž—ȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ Řśȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ ž—’—ȱ 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 $18.45 billion supplemental for Iraq. See CRS Report RL33262, Foreign Policy Budget Trends: A Thirty-Year Review, by (name redacted). 67 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŘŜȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ . Foreign Operations Appropriations, FY1999-FY2009($ 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.” ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ Řŝȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ ȱ 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 ‘’—ŠȂœȱ˜›Ž’—ȱ’Ŝşȱ 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 ˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ ŘŞȱ ȱ ˜–™Š›’—ȱ •˜‹Š•ȱ —•žŽ—ŒŽȱ 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 p [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3ARL34620. Public record. Not legal advice.