China’s attempts to use its “soft power” assets are increasingly successful, although not without problems, according to a recent United States congressional study.

Soft power means the non-military tools of foreign and national security policies, including international trade and investment, development assistance, cultural influence, humanitarian aid, travel and tourism.

On May 5, Senator Joseph Biden, chairman of the Senate Foreign Relations Committee, released a study, prepared by the Congressional Research Service (CRS). The study, “China’s Foreign Policy and Soft Power in South America, Asia, and South Africa” found both strengths and weaknesses in China’s approach to the world.

On the plus side China provides the developing world access to cheap credit and inexpensive consumer goods, and many countries are enjoying rapidly rising revenues due to Chinese demand for their exports.

On the negative side, China’s manufacturing strength makes it difficult for industries in the developing world to gain a competitive advantage, putting some out of business. And China’s investment in developing economies, particularly in natural resource extraction, sometimes undermines international efforts to link aid and investment to measurable progress by recipient countries in combating corruption, improving transparency, and respecting human rights.

The study noted, that given China’s non-democratic regime it holds a comparative advantage in attempting to increase its influence. The study noted:

The recipient governments of PRC [People’s Republic of China] trade and investment are particularly attracted to the fact that Chinese money generally comes with none of the pesky human rights conditions, good governance requirements, approved-project restrictions, and environmental quality regulations that characterize US and other Western government investments. With an authoritarian government that has few if any democratic imperatives, China has capitalized on its willingness to make such “unrestricted” international investments as part of its “win-win” international strategy.

One example was in response to the December 2006 military coup in Fiji when Beijing promised to continue its aid programs on the grounds that the coup was Fiji’s “internal” affair.

On the other hand such a “hands-off” approach could have negative longer-term implications for how China is viewed within the countries in which it is investing. Over the long term China’s approach has potential negative consequences that could counterbalance any soft power advantages.

But as China has become more engaged in world affairs, it has also discovered that its foreign entanglements may not always be popular at home or abroad. The report also indicates that China must grapple with many limitations on its influence. CRS cited a study of UN voting records that found that nations with increased trade dependence on China do not appear more willing to vote with Chinese interests.

Moreover, CRS found that China’s soft power achievements — such as disaster relief assistance worldwide — pale in comparison to those of the United States. The soft power gains that China hopes to achieve are minimal compared to the capacity and willingness of the United States to take on costly global tasks such as international disaster aid. “Nothing in Beijing’s current soft power approach suggests it is willing to embrace such altruism,” according to the study.

CRS also found that China’s cumulative stock of foreign direct investment (FDI) worldwide amounted to just $73.3 billion at the end of 2006 — 0.58% of global FDI.

In addition, America’s private sector leaves a “substantial global footprint” sometimes overlooked by those comparing only government directed overseas initiatives. Aside from US business interests these include such diverse products as schools, newspapers, journals, banks, movies, TV programs, novels, rock stars, medical institutions, politicians, religious groups, and non-governmental organizations.

The study also found that there is little agreement on whether China marshals its “soft-power” assets as part of a pragmatic, overarching strategy. Nobody is sure whether China makes decisions in general terms, with regard to specific regions or countries, or whether it is just a series of marginally related tactical moves to seek normal economic and political advantages. Of course, as the study notes, similar questions could be raised about the overall US approach to China.

The fact that China uses soft power does not, however, mean they are disconnected form hard power goals. The study notes that in all three of the regions — Latin America, Asia-Pacific and Sub-Saharan Africa — discussed, where China is most active, access to energy resources and raw commodities to fuel China’s domestic growth plays a dominant role in Beijing’s activities.

China has oil and gas exploration contracts with Brazil, Ecuador, Bolivia, Colombia, Venezuela and Cuba; oil contracts and pipeline deals are a major part of China’s activities in its relations with Central Asian states such as Uzbekistan and Turkmenistan, and China’s oil exploration interests extend to Burma, Vietnam, and Malaysia. Imports of crude oil constitute the bulk of China’s imports from African states.

China also deploys its soft power as part of the political dynamic of trying to separate Taiwan from its remaining diplomatic relationships, although this dynamic varies according to region. While it is important in China’s African relationships, it is not important in China’s relations with Central Asian countries, where Taiwan has no official diplomatic relations. It is a negligible factor in China’s relationships with Southeast Asian countries, where Taiwan has significant economic interests but no diplomatic ties.

But the Taiwan-China competition looms large in China’s relationships in Latin America and the Caribbean. The region’s proximity to the US mainland allows Taiwan’s president and senior leaders to ask for symbolically meaningful transit stops in the United States when making official visits to western hemisphere countries. A significant reduction, or even the disappearance, of Taiwan’s Latin America and Caribbean relationships could greatly impair this US connection.