Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

China is spending billions to make the world love it

Posted by hkarner - 28. März 2017

Date: 25-03-2017
Source: The Economist

Can money buy that sort of thing?

IMAGES of China beam out from a giant electronic billboard on Times Square in the heart of New York city: ancient temples, neon-lit skyscrapers and sun-drenched paddy fields. Xinhua, a news service run by the Chinese government, is proclaiming the “new perspective” offered by its English-language television channel. In Cambodia’s capital, Phnom Penh, children play beneath hoardings advertising swanky, Chinese-built apartment complexes in the city. Buyers are promised “a new lifestyle”. Across the world, children study Mandarin in programmes funded by the Chinese state. Some of them in Delaware don traditional Chinese robes and bow to their teachers on Confucius Day.

For many years, shoppers around the world have been used to China’s omnipresence: “Made in China” has long been the commonest label on the goods they buy. More recently, however, the Chinese government has been trying to sell the country itself as a brand—one that has the ability to attract people from other countries in the way that America does with its culture, products and values. A decade ago the Communist Party declared a new goal: to build “soft power”, as a complement to its rapidly growing economic and military strength. It spends some $10bn a year on the project, according to David Shambaugh of George Washington University—one of the most extravagant programmes of state-sponsored image-building the world has ever seen. Mr Shambaugh reckons that America spent less than $670m on its “public diplomacy” in 2014.

The party borrowed the idea of soft power from an American academic, Joseph Nye, who coined the term in 1990. Mr Nye argued that hard power alone was not enough to wield influence in the world. It had to come from “the soft power of attraction”, too. China was acutely conscious that it lacked it. Many in the West were deeply suspicious of its authoritarian politics. In Asia people feared China’s emergence as a regional hegemon. China knew it could use its economic might to win over governments, such as by building roads, railways and stadiums for them. But Mr Nye saw those kind of investments as expressions of hard power. China decided it needed more of the soft kind as well, so that foreigners would feel naturally inclined to do its bidding.

After several years of debate about soft power, or ruan shili, among Chinese academics, China’s then president, Hu Jintao, spoke up on the topic in 2007, telling a party congress that China needed to build it. Mr Hu’s successor, Xi Jinping, has stepped up the effort. In 2013, about a year after he took over as China’s leader, Mr Xi convened a meeting of the ruling Politburo to discuss soft power. Its members agreed that it was a vital ingredient of Mr Xi’s “Chinese dream of the great revival of the Chinese nation”—the term “Chinese dream” being one of Mr Xi’s favourites.

Mr Xi has made himself promoter-in-chief of this new form of power (helped when he travels abroad by the highly visible presence of his elegant, smiling wife). His efforts to boost it were on display at the World Economic Forum in Davos in January, where he won plaudits for extolling globalisation and calling for unity in the fight against climate change. Even Mao Zedong, who enjoyed a cult status abroad among some left-wing academics, put far less work into winning over foreigners.

Raise the red lanterns
According to Mr Nye, whom Chinese officials acknowledge as a guru on the topic, there are three main ways that a country can gain soft power: through its political values, its culture and its foreign policies. But winning on all fronts is not easy. The party knows that its ideology has little chance these days of attracting others. Arguably China’s soft power was stronger in the 1950s and 1960s when Mao, a brutal but charismatic dictator, espoused a socialist Utopia that inspired many people around the world. Nowadays some Chinese academics speak of a “China model”—the winning combination, in their view, of authoritarian politics and somewhat liberal economics (with a big role for the state). But Chinese leaders prefer to gloss over the politics when describing their country to foreigners. In 2008 the opening ceremony of the Olympics Games in Beijing barely hinted at the party or its principles.

Instead, China’s soft-power strategy focuses mainly on promoting its culture and trying to give the impression that its foreign policy is, for such a big country, unusually benign. The culture that the party has chosen for foreign consumption is mainly one that was formed long before communism. Confucius, condemned by Mao as a peddler of feudal thought, is now being proffered as a sage with a message of harmony. Since 2004 China has established some 500 government-funded “Confucius Institutes” in 140 countries. These offer language classes, host dance troupes and teach Chinese cooking. Many of them are on campuses (an activity involving one, at the University of Delaware, is pictured). China has also set up more than 1,000 “Confucius Classroom” arrangements with foreign schools, providing them with teachers, materials and funding to help children learn Mandarin.

Let there be no confusion about Confucius

China hopes foreigners will take up some of its traditional customs. For example, it has set out to make Chinese new year as popular as Christmas. In 2010 the government put on fewer than 100 new-year events in foreign countries. This year it sponsored some 2,000 of them in 140 countries to mark the year of the chicken. Red-coloured Chinese lanterns swayed in city streets thousands of miles from the home of the lunar festival. The Communist Party wants China’s cultural presence to reach everywhere: it recently staged a fashion show in Ethiopia’s capital, Addis Ababa, featuring the qipao, a sleeveless dress that gained popularity among fashionable Chinese women in the 1920s.

China’s diplomats have been busy trying to convince foreigners that China’s rise is nothing to fear. Mr Xi speaks of a “new type of great-power relations”, suggesting that China can co-exist with America without the kind of rivalry that caused the two world wars. His “One Belt, One Road” scheme—involving Chinese investment in infrastructure across Asia, the Middle East, Africa and Europe—aims to reinforce China’s image as a country eager to use its newfound wealth for the good of the world (see article).

To help craft such an image, China has been investing massively in its foreign-language media. Xinhua, the government’s main news agency, opened nearly 40 new foreign bureaus between 2009 and 2011, bringing its total to 162—at a time when cash-strapped media organisations elsewhere were shutting them down (it hopes to have 200 by 2020). The number of Xinhua correspondents based overseas doubled during that time. In December the state broadcaster rebranded its international media service, calling it China Global Television Network. Its six channels aim to compete with global services such as the BBC, CNN and Al Jazeera. (Mr Xi urged the network to “tell the China story well, spread China’s voice” and “showcase China’s role as a builder of world peace”.) China Daily, the government’s main English-language mouthpiece, pays for inserts in newspapers such as the Washington Post and the Wall Street Journal.

The government is trying to extend its reach online, too. Last year a government-affiliated media group spent 30m yuan ($4.35m) to launch a free, English-language website called Sixth Tone. It tries to sell China’s message by being more sassy, and sometimes more critical, than other state media. With the party’s blessing, private companies are getting involved, too. In 2015 Alibaba, China’s biggest e-commerce firm, paid $260m for the South China Morning Post, Hong Kong’s flagship English-language newspaper which has incisive—and often critical—reporting on Chinese politics. The deal has raised fears that Alibaba will try to turn the newspaper into a cheerleader for the party. China’s richest man, Wang Jianlin, is trying to buy film studios and production companies in Hollywood, the epicentre of American culture (China’s clampdown on capital outflows may have been frustrating his efforts recently—earlier this month he withdrew a $1bn bid for Dick Clark Productions, an iconic Hollywood firm).

China wants its message to be clearly visible in the heartland of America’s capitalist culture. It began advertising itself in Times Square in 2011 (see picture). Last year Xinhua used its billboard there to broadcast a video 120 times a day for two weeks defending China’s territorial ambitions over disputed rocks in the South China Sea. Sometimes the party uses covert means to sway foreign opinion. In 2015 an investigation by Reuters, a news agency, revealed that a Chinese state broadcaster, China Radio International, controlled at least 33 radio stations in 14 countries, including the United States, but was using front companies to mask its ties with them. Reuters said the stations avoided airing anything that might portray China in a negative light.

Sweet and sour
But when Mr Nye wrote about soft power, he suggested that governments could not manufacture it. He argued that much of America’s had sprung from its civil society: “everything from universities and foundations to Hollywood and pop culture”. The party is distrustful of civil society; its soft-power building has been almost entirely state-led. China has tried to combine elements of soft power with the hard power of its illiberal politics. Far from enhancing China’s global image, this approach has often served to undermine it.

Take the Confucius Institutes and Classrooms. In 2007 a senior party leader described these as “an important part of China’s overseas propaganda set-up.” But many cash-strapped universities have gratefully supplanted their own language courses with ones led (even funded) by Confucius Institutes. In some places Confucius Institutes have replaced or started up entirely new China-studies programmes. Most of them do not actively push the party line, but Confucius Institutes usually skate over sensitive political topics such as the crushing of pro-democracy protests in 1989.

They often attract controversy. In 2013 McMaster University in Canada severed ties with its on-campus Confucius Institute after one of the institute’s employees was forbidden to follow Falun Gong, a spiritual sect that is banned in China (the institute subsequently closed down). At a European Chinese-studies conference in 2014, the Chinese head of Confucius Institutes worldwide ordered pages referring to a Taiwanese educational foundation to be ripped from each programme. Such attempts at censorship only help to reinforce Western misgivings about China’s politics and undermine its soft power.

China’s efforts to use its global media to paint a rosier picture of the country also face a tough challenge. Its television networks employ foreign anchors (and plenty of panda footage) to try to win audiences abroad. But foreigners can also see the Chinese state’s heavy hand, such as when it mobilises pro-China crowds to drown out protesters during visits by Chinese leaders, or when it arm-twists foreign politicians not to complain about China’s human-rights record (Liu Xiaobo, a Chinese human-rights activist who was awarded the Nobel Peace prize in 2010, languishes in a Chinese jail, rarely mentioned in public by Western leaders). In February an official at the Chinese embassy in London warned Durham University not to host a vocal critic of the party: a former Miss World contestant who was born in China and raised in Canada—the country she represented.

As for China’s message of peace to other countries, many in Asia are far from convinced. Its grabs for territory in the East and South China Seas have fuelled widespread resentment. The rapid expansion of its navy and air force, and its build-up of missiles, have sown anxiety in America, too.

China’s soft-power push has made some gains. In global opinion polls respondents from Africa tend to be more positive about China than people from other regions. That is partly because of the money China has poured into the continent—in Angola every professional football match is staged in one of four, Chinese-built, stadiums. Younger people everywhere often view China more favourably than older people (see chart). This is a sign, perhaps, that the country is capable of being cool—who does not get a buzz out of Shanghai’s skyline? Portland Communications, a public-relations firm, has conducted surveys of public attitudes towards 30 countries—most of them, apart from China, rich ones. China ranked bottom in 2015. Last year it crept two places higher, above the Czech Republic and Argentina.

But money has not bought China anything like the love it would like. A year before Mr Xi took over, just over half of Americans had positive impressions of China, according to the Pew Research Centre. By the end of 2016 that share had fallen to 38% (see chart). Pew found a similar trend in other countries. In 14 out of 19 nations it polled between 2011 and 2013, views of China became less friendly.

No thanks to the party
China’s rapid economic development has won it many admirers. But the social and environmental costs of this have also produced many critics. A country can have soft power and smog as well (America has had plenty of both in much of its recent history). But China’s air pollution undermines its soft power: it is widely seen as evidence of a callous government that cares more about making the country richer than the health of its people or the planet. Many foreigners now associate the country with smog—an important reason why 37% fewer international tourists visited China in 2015 than in 2007. (Other reasons for the drop included the cost and increasing hassle involved in obtaining visas, and the yuan’s exchange rate.) Mr Xi’s eagerness to join the fight against global warming is partly driven by a desire to regain the soft power China has lost owing to its environmental horrors.

Some people in China privately grumble that the party itself, with its intolerance of dissent, is the biggest obstacle to the country’s soft-power development. Since taking office, Mr Xi’s relentless efforts to clamp down on civil society have hardly helped. He has also been trying to strengthen the party’s control over the arts: in 2014 he said they should promote socialism rather than be “slaves to the market”. That is unlikely to help China emulate the success of America’s television shows, which project an attractive vision of American culture into people’s living rooms the world over.

Few people outside China want to watch its programmes, which are often thinly disguised propaganda. The success of China’s most successful film globally, “Crouching Tiger, Hidden Dragon”, a co-production involving American companies, has not been repeated since its release in 2000. “Kung Fu Panda”, an American-made animated film series, has perhaps done more to boost China’s soft power than any movie made by the country itself. Small wonder that China was keen to enter into a co-production for the third in the series, which came out last year.

State-controlled media in China have reported with relish on commentary in America suggesting that Donald Trump’s presidency may deal a heavy blow to the United States’ soft power. If that arises from the appeal of a country’s culture, political ideals and foreign policies, as Mr Nye reckons, then America’s soft power is threatened in two of these domains. China’s political system may not exert much of a global pull, but it could begin to look a bit more attractive to some people when compared with America’s.

China has some attributes that it can play to its advantage. For example, it has no colonial history beyond its current borders and has started no wars in nearly 40 years. In a turbulent world, China’s leadership appears relatively stable and predictable (at least to the casual observer—Mr Xi’s determination to crush dissent suggests he sees serious threats to his power).

When Mr Xi became the first Chinese president to address the global elite at Davos, only days before Mr Trump was inaugurated, he appeared to sense an opportunity to bask in a rare glow. But the upswing in China’s soft power is likely to be limited. Chinese officials themselves quietly ask whether China’s strategy can ever succeed. In 2015 a senior official, Zhou Hong, wondered aloud what state-sponsored soft power could achieve. “Without the broad participation of the people,” he wrote in the party’s main mouthpiece, the People’s Daily, “the external propagation of culture not only loses its meaning, but also loses its intrinsic energy.” Mr Zhou was right about the Chinese people’s role. China will find it hard to win friends and influence nations so long as it muzzles its best advocates.

Date: 23-03-2017
Source: The Economist
Subject: China’s growing clout in international economic affairs

As America retreats, China advances

THE IMF “systematically impoverishes foreigners”, and the World Bank’s advice has “negative value to its best clients”. These harsh words were voiced not by lefty critics of the Washington Consensus, but by two men (David Malpass and Adam Lerrick, respectively) whom Donald Trump has picked to lead his Treasury’s dealings with the rest of the world, including the international financial institutions (IFIs), such as the World Bank and IMF, and the G20 group of leading economies.

Their future boss, Steven Mnuchin, America’s treasury secretary, is not much more reassuring to the global financial establishment. At his first G20 meeting, in Baden-Baden in Germany on March 17th-18th (pictured), he vetoed a long-standing pledge to “resist all forms of protectionism”. It had often been breached. But hypocrisy is the tribute vice pays to virtue.

To veterans of international economic affairs, this combative stance is baffling. America’s government now seems to disdain a set of institutions it nurtured into life—institutions that are more commonly criticised for following America’s will too closely. “The United States is just handing the leadership over to China of the multilateral system,” Jeffrey Sachs of Columbia University told Bloomberg this week.

But if there is a vacancy, is China qualified or even interested in the job? In January President Xi Jinping seemed to audition for the role in a speech praising globalisation at the World Economic Forum in Davos, Switzerland. As evidence of its capabilities, China can also point to a hefty portfolio of chequebook diplomacy. The China Development Bank, one of its policy lenders, already has a bigger book of overseas assets than the World Bank. Another institution, the Export-Import Bank of China, is not far behind. In addition, the country’s central bank has extended currency-swap lines to over 30 countries, including many that America’s Federal Reserve would not touch.

What about its willingness? Most of China’s economic diplomacy to date has been bilateral, allowing it to win loyalty, reward friends and secure contracts for its companies. Over 60 countries will, for example, supposedly benefit from Mr Xi’s nostalgic vision of a revived Silk Road (the “Silk Road Economic Belt and 21st Century Maritime Silk Road”, mercifully shortened to “One Belt, One Road”, or OBOR).

As for multilateral efforts, China’s most eye-catching initiatives have worked around the existing system, not through it. It set up two multilateral lenders of its own, the New Development Bank (known as the BRICS bank, based in Shanghai, with financial contributions from Brazil, Russia, India and South Africa as well as itself), and the Asian Infrastructure Investment Bank (AIIB), in Beijing, which just increased its membership to 70, including every G7 country except Japan and America.

So it might seem that China has little interest in filling any gaps America might leave in the old multilateral system. But that would ignore another, less heralded trend. Overshadowed by its bilateral boondoggles and multilateral innovations, China’s relationship with the incumbent IFIs has been warming. It has become more “compliant” with G20 commitments, according to the G20 Research Group at the University of Toronto (see chart). Its currency is now more fairly valued and its current-account surplus has narrowed, removing a bone of contention with the IMF.

The IMF’s decision in 2015 to include the yuan as one of five reserve currencies in its Special Drawing Rights basket has also helped to rebut the notion that the fund is an arm of an American policy of containment. Moreover, since China’s ham-fisted devaluation earlier that year, it has often sought the IMF’s advice on managing the transition to a more flexible yuan and communicating its policy to the markets.

China is similarly happy to learn what it can from the World Bank, which has advised it on everything from managing the debt of its provinces to cleaning the air in its cities. The bank’s suggestions are not always taken. But at least China seems to value its advice non-negatively.

China’s relationship with these institutions is also becoming more generous. It is now the 11th-biggest donor to the International Development Association (IDA), the arm of the World Bank that helps the world’s poorest countries. The China Development Bank has co-financed several World Bank projects in Africa.

Last autumn, when the IMF was looking for money to help Egypt, it phoned China, which agreed to extend a currency-swap line worth 18bn yuan ($2.6bn). The call took only five minutes and China’s generosity embarrassed the G7 into stumping up some money in addition. China had been similarly helpful to the IMF bail-out of Ukraine a year earlier.

The World Bank and the IMF are imperfect vehicles for China’s economic diplomacy. The bank’s capital constraints might inhibit a big expansion in its lending and China’s voting power and financial stake in the IMF will rise only if America permits. It took Congress six years to approve the last reform and it is hard to imagine the next round, due in 2019, winning much support from Mr Trump. But by adding extra dollops of financing to favoured bank and fund programmes, China can nonetheless steer the multilateral system indirectly, by adding its weight where it sees fit.

In the long term, if China becomes the world’s leading economy, it is conceivable it will become the biggest financial contributor to the bank and the fund. At that point, according to their articles of agreement, their headquarters would have to decamp to China. All the more reason for the World Bank to help Beijing clean its air.

Advertisements

Kommentar verfassen

Bitte logge dich mit einer dieser Methoden ein, um deinen Kommentar zu veröffentlichen:

WordPress.com-Logo

Du kommentierst mit Deinem WordPress.com-Konto. Abmelden / Ändern )

Twitter-Bild

Du kommentierst mit Deinem Twitter-Konto. Abmelden / Ändern )

Facebook-Foto

Du kommentierst mit Deinem Facebook-Konto. Abmelden / Ändern )

Google+ Foto

Du kommentierst mit Deinem Google+-Konto. Abmelden / Ändern )

Verbinde mit %s