David or Goliath? China's battle to win the war of perception

To the outside world China is a rich, monolithic superpower – but inside troubles mount and confidence remains fragile


Xu Shunjian is a diplomat. Not the official, suave and suited, our-man-in-Kampala kind. But for three years he has been doing his bit to change perceptions of China.

He had never left Fujian province before he flew 6,000 miles to Uganda, where his team is turning a remote, dusty, rutted track into a smooth road winding 76 miles (122km) across the country.

"Before we came here, the locals had only seen Chinese people in movies. So they believed every Chinese man could do kung fu and was tough," the slim, bespectacled graduate said with a chuckle.

"I thought African people were wild. Now that I've come here, I see they are much more friendly."

Three decades ago, Xu and his compatriots had little opportunity to leave their country nor meet the few foreigners who visited. Now China is wide open to the world. But while its growing reach has forged new alliances and better understanding, it is also creating new tensions.

From its recent naval confrontation with the US in the South China Sea, to its anger at western pressure over Tibet, Beijing appears ever more confident as its reach extends around the globe – and its rivals appear more watchful.

For years, foreign policy was guided by Deng Xiaoping's cautious injunction, Tao guang yang hui ("hide brightness, cherish obscurity") – or, in the official translation, "nourish capabilities and bide our time".

But there is nothing obscure about China these days; it seems that its time has arrived. Just scan the recent headlines: Chinese workers strike in Romania; Chinese property hunters seek bargains in New York; Chinese peacekeepers patrol Darfur and Kosovo; the Chinese navy battle Somalian pirates. The premier, Wen Jiabao, publicly frets about the safety of its vast US treasury holdings, and President Hu Jintao took centre stage at the G20 meeting in London. Analysts begin to talk of the "G2"; Americans of "our most important bilateral relationship".

Vice-president and heir apparent, Xi Jinping, struck a very different note to Deng on an overseas trip this spring.

"There are some well-fed foreigners who have nothing better to do than point fingers at our affairs," he complained, in brusque remarks unreported by the state media but quickly noted on Chinese blogs and by foreign diplomats.

"China does not, first, export revolution; second, export poverty and hunger; third, cause troubles for you. What else is there to say?"

Western media bias
Xi's aggrieved tone might confuse the west, but it resonates with his public. This year's publishing sensation is China is Unhappy, a collection of angry essays railing at foreign bullies and domestic fascination with western ways. Grievances range from protests during the Olympic torch relay to high-consuming nations' calls for China to cut pollution; one author suggests China might have to break with the west one day.

Despite sniffy, sometimes despairing reviews from liberals, it topped the bestseller lists. Its lengthy list of gripes includes western media bias, but its ­publicity-savvy authors are happy to take their chances; they chose to meet the Guardian in a Starbucks in central Beijing.

Between sips of his cappuccino, co-author Wang Xiaodong explained why China should engage in the arms race; he deems this year's 14.9% rise in military spending insufficient. A slight man in his fifties, he has the air of a schoolmaster but a shock-jock's sense of mischief and flair for incendiary statements.

"China must have the power to wipe America from the earth. It's the only way to deter them," he said cheerfully.

"China is really willing to co-operate with the west, but is still refused by western nations.

"We have felt very comfortable over the years of free trade, because we have kept winning. But also, the west keeps losing. So we worry that at some point the west will use military or political power to fight China. The other thing is that, for a long time, China has needed more resources … That must create conflicts."

Though many Chinese dispute his conclusions, few disagree with his basic premise.

"People outside see China as much more powerful than China perceives itself to be. Our challenges and troubles have expanded as well as our interests," explained Professor Shi Yinhong, a highly respected foreign policy expert at Renmin university. He dismisses the idea of a bipolar world; China's current status is perhaps "a regional power, plus".

Historic humiliations
To outsiders, China is a giant: a huge, populous, monolithic state, with rapidly rising military spending, vast coffers for foreign investment and an increasing keenness to impose its views.

But where they see Goliath, China sees David: an over-populated, under-resourced developing country still recovering from historic humiliations at the hands of foreign powers – including the British – and still pushed around by the west.

"There's concern [among leaders] that if China's growing power becomes too conspicuous, other countries will view it as a threat, gang up on it and try to contain it," said Professor Susan Shirk, author of China: Fragile Superpower and a former US deputy assistant secretary of state.

"They have worked very hard to show they want to be more co-operative and that as they become more powerful they're not a threat. They're willing to compromise, negotiate; they're dealmakers."

China is willing to show its strength; last winter it postponed an entire EU summit because Nicolas Sarkozy had met the Dalai Lama. But it also wants the world to like it. Relations with Taiwan are at their best for decades, as Beijing engages with a more mainland-friendly president. It's pouring billions into "soft power" projects, setting up Confucius Institutes and expanding its foreign-language media.

Yet a recent poll for the BBC World Service found that while 92% of the Chinese surveyed believed China's global influence was mainly positive, only 39% of respondents in other nations agreed – a 6 point drop on the previous year. It was the largest perception gap in any of the 21 countries.

Ethnic Uighurs look on as Chinese security forces stand by the entrance to the Uighurs neighborhood in Urumqi in China's Xinjiang autonomous region, July 8, 2009

"The public hold a strong hatred against the Chinese," declared Wang.

"Sometimes people in government are actually more friendly – they are more practical. But American people have a stronger hatred against Chinese people aroused by the media. It's the same in Germany, France and Britain," he insisted.

Mutual suspicions erupted with last spring's fatal riots in Lhasa and the subsequent explosion of wrath from nationalists. They accused the western media, and wider public, of indifference to Chinese deaths, an exaggeration of Tibetan sufferings and deliberate distortions of the truth. China's fenqing ("angry youth") roared into action, bombarding journalists with death threats.

When a Tibetan activist tried to wrench the Olympic torch from a Paralympian during the Paris leg of the relay, passions went into overdrive. Thousands of flag-waving activists besieged Carrefour's Chinese stores; in Hunan, an American shopper fled as a crowd yelled "Kill the Frenchman".

Simmering rage
Years of "patriotic education" and media manipulation have helped to create this simmering rage. But nationalism is a longstanding force which China's leaders fear as well as foster. It bolsters support for an unelected government. It can also push them towards foreign policy positions they suspect are unwise and it has a history of toppling regimes which fail to meet patriotic expectations. The Carrefour protests were squashed before they could spread.

Wang is well-versed in western thinking, from classical philosophers to Jared Diamond and Francis Fukuyama. He has travelled abroad and reads and watches western media. But he says there is no paradox in the fact that increasing western influence is accompanied, in many cases, by increasing hostility. He sees it as a natural reaction to the idealisation of the west.

"When Chinese people go outside they realise the outside world is not as good as it was described and China is not as bad. That's why the more Chinese people travel, the more nationalistic they become.

"Our book is focused on these points because many Chinese think westerners are angels. [But] to be honest, I don't think there should be such huge resentment. We're business partners," he said.

Cheap Chinese labour has undercut western manufacturers, but also kept inflation down. Meanwhile, western shoppers have kept Chinese citizens in work. China has taken vast amounts of mineral wealth from Africa; but it has also provided infrastructure.

China and other nations will continue to clash on many fronts – from human rights to resources. But China's citizens are looking to a multipolar world, not to global supremacy.

When a recent internet survey asked whether China had the power to lead the world, 54.4% agreed it "should seize the best opportunity created by the financial crisis". Another 41.3% reached very different conclusions, judging that "this radical nationalism must be brought under control".

Thousands of miles away from home, Xu Shunjian is digging into rice and stir-fried vegetables with his chopsticks, as Chinese state television blares in the background. He came to Africa only to make money, and he misses his motherland.

But after supper he shows off photographs of dinner at a Ugandan colleague's home: "I learned to use fingers to take food like that … you see!" he exclaimed happily.

"I want to learn things from different countries and learn about their differences," he said. "Of course, when you go to another country, your patriotic feelings will rise. But I've also become more open-minded."

Guardian

China’s rising global power and its implications on Sino-Tibetan affairs

This analytical paper is written to coincide with the gathering of the second special general meeting of the Tibetan Diaspora towards the end of September 2012.

The Kashag of the Central Tibetan Administration and the Tibetan Parliament-in-Exile have convened this important gathering to mobilise, energise and find new solutions to overcome the very urgent and desperate current situation in occupied Tibet, particularly the stream of selfless act of self-immolations carried out by Tibetans inside and outside of Tibet. The general consensus of the motivation and reasons behind the drastic acts of these Tibetans were for the return of His Holiness The Dalai Lama to Tibet and to achieve freedom for Tibetans from the rule of communist China.

This piece that I am about to communicate is an independent analysis of the present day China, China and the world, the world and China, the Tibetan issue and the opportunities as well as the realities that Tibetan movement faces. I am writing this piece not as an academician or as a specialist on either China or Tibet but as a lay person, who has watched, worked and continues to study the Sino-Tibetan relationship or no relationship with keen interest.

Therefore, it is fitting to quote a stanza from an ancient master Shanti Deva who said:

“Here I shall say nothing that has not been said before,

And in the art of prosody I have no skill.

I therefore have no thought that this might be of benefit to others;

I wrote it only to habituate my mind.”

I am sure that there is nothing in this piece that the reader has not read or heard already. But I hope this piece will serve as a small aide-memoires of the current position of China and the current international scenario that are necessary to be considered in making our deliberation to find solutions for Tibet and Tibetans inside Tibet.

It is particularly important this time because the deliberations of the delegates will not formally be commented, protected or blessed by His Holiness The Dalai Lama as the political head of Tibetan people. In other words, we do not have the safety cover of His Holiness The Dalai Lama, which we have always relied upon as a fall back and a guarantor. We are not so lucky now.

It is absolutely essential and vitally important that we consider the wider context under which China is now operating in the world and how other countries including superpowers are behaving, positioning and formulating not only their foreign policies, but also their economic and domestic policies towards China and its impact and consequences on Tibetan issues now and for years to come.

Within a period of thirty years, a periodic span of three generations of Chinese leadership (Deng Xiaoping, Jiang Zemin and Hu Jintao), China has been transformed from a crippling communist regime to a super power next to the United States.

At the beginning of 2012, The Economist almost as a matter-of-fact reported that China will have a larger economy than America in purchasing power parity in less than five years from now (2016)

The economist also methodically chronicled and published the following statistics:

* China’s net foreign assets surpassed the United States in 2003 (China’s net foreign assets of $2 trillion today versus US net foreign debt of $2.5 trillion);

* Chinese exports surpassed the US in 2007;

* Chinese fixed capital investment took the lead in 2009;

* Chinese manufacturing output surpassed US in 2010;

* Chinese energy consumption also surpassed US in 2010;

* Chinese patent applications granted exceeded the United States applications for the first time in 2010.

* Based on reasonable projections of relative real growth rates China will have the larger GDP as measured by market exchange rates within the next seven years (2018)

China’s stated global aim and core interests:

Beijing’s stated core objectives, loosely and by no means exhaustive, consists of (a) the preservation of communist party and it’s rule in China, (b) unification of Taiwan with mainland China, (c) continuation of rule of Tibet, (d) unhindered access to world’s mineral resources and (e) non acceptance of what China calls imposition or importation of western values such as human rights and democracy in Chinese society.

The world and China

What has become evident is that, during these last three decades, China’s attitude towards the rest of the world has significantly changed since the early days of Deng Xiaoping’s modernisation program or vision of Chinese economy for alleviating the Chinese society from poverty in the aftermath of Mao’s cultural revolution and isolation of China from the rest of the world.

During the past decade, buoyed by China economic success, the country’s regime has manifested in a very assertive entity, threatening those countries with punitive economic repercussion who criticises its human right records, democracy, and issues relating to Tibet and Xinjiang.

This assertive Chinese policy on global development and dominance is imposed on other countries through a mixture of force and diplomacy. It has rattled and confronted the reality, the challenges that other governments especially western governments, parliamentarians, political thinkers and ordinary members of the society alike, may have envisaged on such a turn around. But none are not only unprepared for the consequences but at the speed of its arrival.

It seems the reality of Deng Xiaoping’s famous tactical policy for China of “biding time and hiding one’s talents or strength” has arrived suddenly within a very short period of three decades, with shock waves for the future of world order politically, economically, and the emergence of the concept of human rights, democracy and rule of law in Asia. My assumption here is that once China has actually obtained national wealth and superpower status, it will increasingly act unilaterally without adherence to international norms.

As a consequence is visible from the changing US policy and perhaps many regional countries too are likely to take active measures to hedge against a more unilateral China in the future so that they are not caught unprepared.

American President George W Bush senior rightly saw and politely stated that China is a competitor, but the US and western world accepted China as a “friendly partner” overshadowed by the stream of cheap imports from China that was to glut the insatiable wants of the western consumer society.

Transfer of western manufacturing know-how and technical expertise to China in the search for high profits for the corporations has made the economic benefits more lucrative to political expediency in the past three decades.

The Rise of China and its Impact on the Regional and Global Order

The real question throughout the world today is what does this rise and rise of China means for the regional and global order. What are its real impacts on both regional and global peace, prosperity, security and stability for the immediate decades ahead? How does this economically powerful China affect it treatment of Tibetans, Uyghurs, Mongolians and other minorities in China?

The current rise of economic power of China has been compared to the possible down fall of Western economic power primarily due to the global financial crisis, which started around 2006 that resulted in a long and still continuing economic recession in Europe and USA. The present economic crisis in Europe is so acute that it is not only affecting the economic recovery of US, but it still has the full potential to unleash a second round of Global Financial Crisis.

For the Western world this unprecedented rise of China is a very uncomfortable force to be reckoned with. According to Kevin Rudd, the former Prime Minister and current Foreign Secretary of Australia, “this will be the first time ever a non western power will dominate the global economic power since the rise of Spanish Empire in 1492 and that this will be the first time ever a non-democratic country will be the world’s largest economy for nearly 300 years”.

When we look at the impact of the rise of China in terms of global peace and security, we must look at it in a much wider worldwide and historical context than the relatives of G2 (US and China) metrics of the 21st century. The global implications of China rising to the top of the global economic position are simply jaw dropping to consider.

It is, therefore, a subject worthy of the most serious reflection and analysis, not just in Beijing and Washington, but across Asia, across Europe and across the world.

Asia Pacific and USA Foreign Policy change:

The inexorable rise of China has forced US to look eastward withdrawing from their war engagements from Iraq and Afghanistan and Europe First policy engagement with North Atlantic Alliance, which has been the back bone of US foreign policy for the past 60 years.

US Secretary of State Hillary Clinton pronounced the Obama administration’s new approach to Asia Pacific in her November 2011 “America’s Pacific Century” speech where she declared that “the future of politics will be decided in Asia, not Afghanistan or Iraq, and the United States will be right at the center of the action”. And she further went on to say that “as we move forward to set the stage for engagement in the Asia-Pacific over the next 60 years, we are focused on the steps we have to take at home to secure and sustain our leadership abroad”.

In a very fluid world of changing politics dominated by giants powers, we need to look back and recollect with deep interest how President Obama’s administration has written a new chapter in American foreign policy, saying that United States will move away from South West Asia to focus on the rising power of china.

Clearly, America is broadening its strategic reach and relations in the pacific region both with individual countries as well as with Asian institutions such as ASEAN (Association of South East Asian Nations) and EAS (East Asia Summit) to engage and to maintain a balance of power to counter the growing power and assertive influence of China. China’s growing global power, influence and its assertive territorial claims in South China Sea has made ASEAN countries nervous of the intentions of China. The Asia Pivot policy of Obama Administration has embraced the US by Vietnam and other member countries as a fallback security against their giant neighbour.

It is important to point out that for the first time ever in the ASEAN Regional Forum’s 45 year history, since its inception, there was no agreed communiqué in their 2012 Annual meeting in Phnom Penh, Cambodia, because South-east Asian countries have failed to reach an agreement on how to deal with China’s assertive sovereignty claims on disputed territory in the South China Sea. 

The Philippines and Vietnamese wanted ASEAN Regional Forum to have a unified policy on South China Sea dispute and to resist Beijing’s insistence that the disputes should be handled on a bilateral level only. Perhaps, American Asia Pivot Foreign Policy may have given these smaller countries some confidence and may have increased their resistance level with China and it seems such countries are reciprocating favourably to the US declared role in Asia Pacific. Rival countries have made claims over territory in the South China Sea for centuries but the recent upsurge in tension has sparked concern that the area is becoming a flashpoint with global consequences.

US had clearly concluded that it not only has vital interests in this Asia Pacific Region in the century ahead, but also that this region will progressively represent the centre of gravity of global economic and strategic power.

US and most of its allies believes that this strategic positioning has kept and will keep the region in peace, thereby enabling open economies to develop, trade and commerce to flourish, and democracies to emerge.

This is where core American and Chinese strategic concepts clash against each other, because the Chinese view that US alliance structures in Asia and Pacific are relics of a cold war past that should be disbanded and that the retention of these alliances is designed to constrain China; and in doing so, continue to frustrate the reunification of Taiwan with the motherland.

Burma

It is not a coincidence that the Secretary of State Hillary Clinton should make the first-ever and a landmark historical visit to Burma in December 2011, reversing a fifty year US Policy of engagement with Burma so soon after Obama Administrations Asia Pivot Policy announcement. US is well aware that such high level visit by the administration will not only give high hopes and expectations for the democratic movement in Burma, but that this will also provide the possibility for the Burmese authorities to rebalance its one sided and suffocating relationship with China, which has been resented by ordinary Burmese people.

Secretary of State Clinton’s meeting with Ms Aung Sun Suu Kyi, a Nobel Laureate, human rights icon and champaign of democracy in Burma, has paved the way for greater normalisation of relations between Burma with US and Europe.

Burma has become a client state of China for the past many decades. China has invested heavily in Burma both for its natural resources and for securing and carrying out the so called Maoist encirclement strategic position in surrounding India – which has given home to His Holiness the Dalai Lama, the exiled Tibetan community and enabling and facilitating the exile Tibetans to preserve their language, customs and the unique cultural heritage of Tibet – from the east, Sri Lanka from the south, Pakistan from the west and occupied Tibet and Nepal from the north.

Japan

The continued mistrust between Japan and China are self evident in the past, but the clash between Chinese fighting boats with coastguard off Japan at the end of 2011 and allowing anti-Japanese protests and demonstration to take place in major cities in China by the Chinese Communist Party is a reminder of another flash point with global consequences.

Japan is one of the most important partners of USA in Asia, and China has consistently complained at USA and Japan’s military alliance. In reference to the annual USA and Japan military drill, which took place in Gotemba at the foothill of Mount Fuji on 21st August 2012, China Daily quotes a defence commentator as saying that the drill “is increasing tension in the region and has shown Washington’s true colours, despite its so-called neutral stance over the issue of disputed islands in the East China Sea”.

Again if we look back to the early days of Obama presidency, one could argue that the preparation for the Asia Pivot and American Pacific Century thinking was already underway soon after the end of 2008. It was evident because the Japanese Prime Minister was the first Oval Office visitor from abroad in early 2009 and Secretary Clinton’s first overseas trip was to Tokyo and not to London or Europe.

Australia

In line with US new policy of engagement in Asia, United State has secured a far reaching agreement with Australia to expand its military presence in the country and facility for joint exercises, training, and access to bases and eventual postings of up to 2500 American troops in northern Australia. Naturally, China is very unhappy with this US positioning.

Australia being a member of the club of G-20 and East Asia Summit Forum is also interested in shaping the future of Asia and Pacific region. Australia has huge commercial interests with mainland China with its mineral resources.

European Union and China

The European Union is the biggest and most important trading partner of China. The EU pursues a friendly strategic partnership with China and welcomes Chinese nods and winks when it hints that they may prop up the Euro. Chinese are openly lobbying Chinese government’s interests in Brussels and in the capitals of the European countries, yet at the same time Chinese leaders are telling off and pointing fingers at the European leaders for their lack of leadership for not “putting their houses in order”. Perhaps, it is really a sign of change in time of European fortune that we witness remarkable and extraordinary acts of dependency and vulnerability to see European States publicly seeking China’s financial support to intervene in Euro-bond markets.

Europe welcomes Chinese investments and China has taken advantage in investing and taking over well known brands and buying up ownership in strategic key industries requiring cash injection for the corporation’s survival.

In less prosperous European economies they have invested by either taking over the control or have taken stakes in key industries such as Ocean terminal at Piraeus port in Greece and wind-power farm in Romania. In other key industries they have taken stakes such as in the makers of polysilicon for solar panels in Norway, 40% stake in Norwegian Statoil, Addax Petroleum of Switzerland, a stake in the Fortis bank of Belgium, stake in the Barclays bank in UK etc.

China has two major demands from the EU. Firstly, China would like EU to lift the arms embargo imposed on it after the 1989 Tiananmen Square massacre. Secondly, it would like EU to grant them the status of a full market economy, which would shield it from anti-dumping measures.

EU member states remains divided and unable to agree on both issues because of the very sensitive political nature of the arms embargo and the inherent nature of the protection required for home grown industries to safeguard employment from cheap imports.

This has inevitably allowed China to manipulate the internal divisions of the member states and play one member state against others thorough the so called bilateral talks and discussions a format China has very successfully followed in South East Asia.

China and Africa, Latin America

Although China’s global influence, be it through force of assertiveness, through natural course or through bullying and blackmailing tactics, is felt almost throughout the entire world. In the above short and very superficial analysis, I have concentrated mainly on China and its relationships with the United States of America, Europe, Asia and Pacific.

Dominance of Chinese influence in the entire continent of Africa is without any dispute. China’s economic controls and political influence in the whole of Latin American world, former USSR republics are also undisputed. China is promoting their state interests in these countries through a combination of aid programs, particularly in Africa where China is now using aid programs to explore open markets for oil, minerals and other resources. In return for the access to natural resources, China lends cheap money, builds roads, railways, airports, bridges, hospitals, sport stadiums, schools and official buildings.

Although, Secretary of State Hillary Clinton did not mention Beijing by name but was directed at China when she said “be wary of donors who are more interested in extracting your resources than in building your capacity. Some funding might help fill short-term budget gaps, but we’ve seen time and again that these quick fixes won’t produce self-sustaining results.” at the global summit on development and aid held in South Korea.

For many of the developing nations China has become an essential partner particularly for those repressive and rogue regime states in African continent, Middle East and Latin American oil reach states.

An Overview on China

Whilst China’s economic power is growing and unstoppable, yet this is a country not at ease with itself and there is a huge number of areas which could derail their progress from becoming the world’s number one superpower.

The particular areas to look out for are both internal and external forces, but the explosion of an internal force is more likely and will have more devastating and chaotic outcome if that were to happen. The internal pressure for reform in China is like a boiling kettle and the Chinese government’s own admitted cost of maintaining the internal security in 2010 was US Dollars 93 billion. Experts believe that this amount is $1 billion more than the government’s publicly admitted national defense budget, and surely, such spending on internal security is a devastating blow for the image of a stable China, which it would like to portray and an undoubted evidence of a State at odds with its own people.

A leading UK think-tank on international affairs, Chatham House, states that there were 9 million petitions to the central government in 2009 and estimates that there are as many as 180,000 mass incidents each year. Most of the disputes have arisen because of infringement and summary acquisition of land rights, unsettled pension payments, conflict of political and lack of participation in decision making process in civil society frustrated by the non transparent and control imposed by one party system.

The second major area of internal conflict pressure point is the existence of massive inequalities in income between cities and countryside; development and income gap between coastal and inland regions; between eastern and western regions, as most of the development and wealth is concentrated in coastal regions. The scale of inequality is illustrated by World Bank’s statistics which states that China has 150 million people living in abject poverty, 24 million people malnourished, but China has 35 Dollar billionaires and over 100 Dollar millionaires.

The third pressure point is the massive problem of corruption and nepotism in Chinese society which is enhancing the marginalisation of ethic minorities, non communist party members, religious affiliated groups and other vulnerable members of the society.

The fourth pressure point is both an internal as well as an international issue which relate to Tibet, Xinjiang and Inner Mongolia on one hand and Taiwan on the other. China’s continued inability to address and resolve the real and unprecedented grievances of the people of Tibet and Xinjiang has continued to dogged the Chinese government by a series of public disorders, unrest, protests and international condemnation of the Chinese government for its hard line policies and handling of these issues, which continues to taint it’s authority and legitimacy of rule in these ethnic regions, especially in occupied Tibet.

Sino-Tibetan Relations: The Way Forward

The objectives of Memorandum on Genuine Autonomy for the Tibetan People proposed by the Tibetan side, which provides the basis for a realistic and sustainable political solution to the issue of Tibet, is sill achievable through a strategy of campaign and continued engagement and negotiation with China even in the face of the latter’s intransigence. All we need is a political will from Beijing to resolve the question of Tibet. The last round of talks between the two side was held in January 2010.

A progressively wealthy and powerful China should have the confidence to settle the Tibetan issue during the life time of His Holiness the 14th Dalai Lama, who is revered and enjoys the full confidence of all Tibetans both living inside and outside of Tibet. China should not fear the sincere overtures of His Holiness in helping China to settle the question of Tibet for the mutual benefit of Tibetan and Chinese peoples.

His Holiness has often talked about and recognised the need and benefits of a wealthy, powerful and industrious China to help bring economic development to Tibet. It is important for the Chinese leaders to realise and appreciate His Holiness’s genuine views and hopes for the benefit of both Chinese and Tibetan communities.

China must also be wise and confident enough to accept that it is in the best interest of China to settle the Tibetan issue as quickly as possible. The unsettled Tibet problem is one of the worst burdens that China has and this is holding back China in the eyes of international community. An amicable political settlement of the issue of Tibet with the return of His Holiness to Tibet will undoubtedly earn China international recognition for its political maturity and moral authority necessary to be a world super power.

Since the election of Kalon Tripa Dr. Lobsang Sangay, the unannounced official Chinese position had been that of a non engagement policy with His Holiness the Dalai Lama and the Central Tibetan Administration.

Of course, this is much regretted from Tibetan side and I hope the new Chinese leadership, which will be selected in mid October, will reverse the existing hard line policy of non engagement with His Holiness the Dalai Lama and Central Tibetan Administration. The new Chinese leadership has the opportunity to seize the moment to restore freedom in Tibet by putting an immediate end to the draconian control imposed in Tibetan areas. This will give breathing space for normal existence to begin, whereby the trauma of hopelessness will cease and may help to end the cycle of tragic self-immolations in Tibet.

As I am giving my finishing and final thoughts to this piece, the number of Tibetans who have set themselves on fire reached 51, of which 41 died. But unfortunately, there is no sign of abatement in this drastic form of non-violent protest against the continued Chinese rule in occupied Tibet and the denial of the return of His Holiness the Dalai Lama to his homeland.

The political movement of self-immolation, which started from inside Tibet, is a testament of desperation and unhappiness endured by Tibetans in Tibet.

We really need to collectively engage in the forthcoming Second Special General Meeting to come up with strategies and programmes, which will enable us to achieve an amicable resolution of the political future of Tibet based on the forward-looking and foresighted principles, philosophies and guidance of His Holiness the Dalai Lama.

Sonam T Frasi is a former Member of Tibetan Parliament-in-Exile

China's cash: Take it or lose it

The Chinese are coming! Just as the summer winds down, announced Chinese acquisition in the United States has reached US$7.8 billion, approaching its all-time full-year record of $8.9 billion.

Significantly, Chinese FDI is pushing westward. While Asia remains the overwhelming favorite, the share of North America and Europe in the total Chinese FDI portfolio grew from less than 3% in 2008 to more than 13% just two years later. The absolute value of that expansion is equally impressive: The $9.54 billion total in 2010 is more than quadruple the level of two years before.

Most recently, China National Offshore Oil Corp (CNOOC) agreed to pay $15.1 billion in cash to acquire Canada's Nexen Inc, on the same day that Sinopec, another Chinese oil company, agreed to acquire a 49% stake in UK North Sea assets owned by Talisman Energy (another Canadian enterprise) for $1.5 billion. Regardless of whether these two deals are ultimately approved - the process continues at this writing - the sheer volume and potential of Chinese foreign direct investment (FDI) will have a profound impact on the global economy, providing both enormous business potential and new challenges.

The world, particularly the West (which is becoming increasingly attractive to Chinese investors) should welcome this trend, but governments must also develop strategies to take full advantage of the economic opportunities it presents.

The July 23 deals are part of China's growing interest in mergers and acquisitions (M&A), which has assumed a steadily expanding share of China's recent FDI. M&A constituted some 46% of Chinese FDI in 2011, up from 18% in 2003. Large state-owned enterprises (SOEs) continue to be the main driver of Chinese outward FDI, making up more than two-thirds of such deals in 2010. The average value of M&A deals is usually larger than greenfield projects: The 143 M&A deals in 2011 have almost the same value as the 918 greenfield projects (the increasing use of M&A by Chinese investors also reflects the growing sizes of Chinese FDI projects).

The westward shift of investment direction is natural after three decades of fast growth that has established China as No 2 among global economies. The growth has primarily been dependent on labor and resource-intensive industries. For the Chinese economy to continue to advance, it has to reform its giant industrial machine toward higher value-added production. The fact that Chinese outward FDI is moving toward matured markets such as the US and Europe is a reflection of this fundamental transition in its economic development. This shift will present opportunities for China to access sophisticated technology and management, mature its large domestic consumer market, and assure a stable supply of resources, as well as skilled labor.

Experts debate whether specific FDI projects are independent, profit-driven commercial decisions or driven by the government as part of its national development strategy. Whatever the conclusion, the choices of industries fit the strategic needs of China's long-term economic development. There is growing interests in China to acquire large stakes in companies in the West that have relatively safe and established energy resources, advanced technology that can supply much needed research and development for Chinese industry, manufacturers with good market bases and potential in the West and in China, or banks that provide a pathway to Western financial markets.

The impending takeover of Nexen comes after a $19 billion bid by the same company to acquire the US oil company Unocal in 2005; that bid was blocked by strong political objections based on controversial national security concerns from the US Congress. It comes at a time when Canadian energy companies are trying to reduce dependence on the US market by building new pipelines toward Asia. The takeover of Nexen will provide the Chinese company with access to sophisticated technologies for oil/gas production, including Nexen's oil-sands, shale-gas, and deep-water leases in North America. It will also provide the Chinese company significant assets in the Gulf of Mexico. CNOOC made the offer after careful preparation to satisfy the needs and political demands of Canadian authorities to avoid an experience similar that of the Unocal acquisition.

If the Nexen deal is completed, it will be another example of a company that has met with strong political resistance in the United States successfully investing in projects with US allies and close partners. Many people believe that the Nexen deal enables CNOOC to park the same money from its unsuccessful bid to acquire Unocal in another country.

Similarly, Chinese telecommunication giant Huawei has been blocked from making acquisitions of US-based technology companies citing national security concerns. But it has had a smooth ride in Europe, setting up six R&D centers and recently acquiring the UK's world-leading photonics research laboratory. Unlike the US, the European Union does not have regulations that distinguish foreign investors from domestic ones.

Without judging whether national-security concerns are credible in each case, a fundamental question remains: If such concerns about Chinese FDI are credible, then should the US be worried about breaches by Chinese investments in allies and partners? This is not to say that the US should follow suit when others make mistakes, but it should rethink its current strategy. A detailed and forthcoming national-security strategy regarding Chinese direct investment that also takes into account critical allies' activity will be key to successfully guarding US security interests and would welcome Chinese investors with clear guidance. However, if it's not about national security but other vested economic interests, then the US is hurting itself by turning away investment capital.

It is natural that the world's two largest economies are not just important trade partners, but also investment partners. It isn't just wise but necessary for the US to take full advantage of westward Chinese FDI with appropriate strategic caution. Thus the US must resist political pressure to oppose Chinese investment based on protectionist commercial interests; national-security-related concerns over Chinese FDI should not be treated in isolation. In other words, national-security concerns should not become a political tool to justify protectionist measures.

At the same time, there is a need to communicate and coordinate valid concerns to US allies and close partners so that US efforts are not compromised elsewhere. These concerns could be addressed through the numerous existing channels between the US and key ally countries, such as the communication lines with the Defense Department, congressional exchanges, and Treasury.

The westward trend of Chinese FDI will continue; the West must adapt to it. The Nexen takeover will be only one of many large-scale Chinese FDI projects to come. Some investors predict an additional $800 billion in Chinese FDI from 2011 to 2016, if current growth rates and government policy hold steady.

Given growing uncertainty in global financial markets and increasing risks in sovereign bond markets such as the euro zone, the need for direct investment by China will likely increase: Since January 2008, Chinese firms have disclosed 1,414 overseas acquisitions with a value of more than $235 billion. For the US to seize this opportunity, a number of other things must also be done: It needs to promote further its open market, good investment environment, and business opportunities. This is particularly necessary to counter the negative image created by a few failed cases that Chinese FDI is not welcomed in the US. But a better definition of national security for US companies and potential Chinese investors will be a critical step toward a comprehensive US approach to Chinese FDI.

Ting Xu

China Inc's debacle in the Outback

Chinese leaders and people attend a memorial for former Chinese Vice President and ''red capitalist'' Rong Yiren at the Babaoshan Revolutionary Cemetery in Beijing in this November 3, 2005 file photo. Credit: Reuters/China Newsphoto/Files

Larry Yung Chi-kin is a loyal scion of the Chinese Communist upper crust. His late father, Rong Yiren, was the legendary "Red Capitalist," one of the few industrialists to stay behind in the mainland after the revolution of 1949. Yung himself went on to found the conglomerate CITIC Pacific and become one of China's richest men.

So, when duty called, Larry Yung answered.

In 2006, foreign mining giants were jacking up prices of the iron ore needed by China's voracious steel industry. At the urging of Beijing, Yung and CITIC Pacific negotiated the rights to exploit a vast deposit of low-grade ore in the red-rock landscape of Australia's remote northwest Pilbara region.

The multibillion-dollar deal seemed to be a coup for China's resource-hungry economy. But Yung and Beijing are now paying a heavy price.

A few kilometers down a dirt track off the North West Coastal Highway, beside a towering pile of red tailings, the company has dug itself into what increasingly looks like a bottomless pit.

The original $2.47 billion budget for the massive open-cut mine and processing complex has blown out to $8 billion and it is more than two years behind schedule. Senior company managers won't rule out a $10 billion price tag for one of China's flagship offshore resource investments. "It has the potential to be a company killer, that's for sure," says Clinton Dines, a former president of mining giant BHP Billiton in China.

It is a dramatic reversal for Yung, 70, who emerged from obscurity after the Cultural Revolution to become first tycoon among China's "princelings," the children and grandchildren of the party elite.

BUNGLED HEDGING

To compound its pain, CITIC Pacific in 2008 bungled an attempt to hedge against the overruns - exposing the company to a further $2 billion in losses. Yung and his long-time deputy, Henry Fan Hung-ling, were forced to resign that year when Hong Kong police and regulators launched investigations into the hedging transactions.

According to people familiar with the investigations, police and regulators in Hong Kong have concluded their probes into suspected fraud, theft and disclosure failings. They have handed their findings to prosecutors in the semi-autonomous city, who are weighing whether to lay charges against some of China's highest-profile business figures in the politically charged matter.

Yung's office did not return calls requesting comment. A spokeswoman for Hong Kong's Department of Justice did not respond to questions about the investigations. Officials in Beijing have been publicly silent about the probes.

But senior Chinese leaders have privately said they are worried the mine could turn into an embarrassing failure, according to Australian government officials and foreign mining executives. Soaring costs and missed deadlines in the Pilbara mine have delivered a major setback to China's global drive to secure reliable supplies of key raw materials.

CITIC Pacific's Australian subsidiary, Sino Iron, is scrambling to begin operations at the mine and release a flow of revenue that is projected to last for 25 years. Shipments were supposed to begin this year, reaching a pace of 27.6 million tonnes a year.

CITIC Pacific chairman Chang Zhenming said at the company's August 16 results briefing in Hong Kong it now expects trial production to begin only in November, the latest in a series of missed deadlines.

"Before the end of the year we should have production ready for export," said Chang, a veteran of China's state-owned finance sector who was drafted in to replace Yung.

OUTBOUND TROUBLES

The saga speaks to the broader problems that China's state-owned giants are having as they venture into the wider world. Resource projects account for most of the $380 billion of total Chinese outbound investment as of the end of 2011, according to China's Ministry of Commerce. Losses on these investments have reached almost $27 billion, official media reports say.

Most of it has been blamed on failures to undertake proper research before deals are signed. "In many of these cases, my view is that due diligence was either poor, non-existent or there was an element of hubris involved," says Mike Komesaroff, managing director of Queensland-based Urandaline Investments, a consultancy specializing in China's minerals and metals industries.

CITIC Pacific declined requests for interviews with senior managers about the Pilbara mine or answer questions about its feasibility study and background research on the project.

The market outlook isn't good. Iron-ore prices are expected to continue sliding as China's economy shows signs of slowing. Australia's Bureau of Resources and Energy Economics forecasts ore will average about $136 a tonne this year, a drop of about 11 per cent from 2011. Some analysts expect steeper declines, with China on track to record its first annual drop in steel output in more than three decades.

It's a major shift. Years of seemingly insatiable Chinese demand delivered a bonanza for Australia's BHP Billiton, the Anglo-Australian Rio Tinto and Vale of Brazil, which together account for almost 70 per cent of world sea-borne iron-ore trade.

Ore, which had traded for less than $13 a tonne in 2000, peaked at almost $200 a tonne last year. In one savage hike in early 2005, the three miners increased prices by 71.5 per cent.

"That really got their attention," says Shanghai-based Dines, who came under fire from steelmakers when he represented BHP in China and now runs hedge fund Caledonia Asia. "From that moment, China really started worrying about securing reliable supplies of raw materials, particularly iron ore, and the cost of those materials."

That's when Larry Yung headed into the Outback.

FLOUR AND TEXTILES EMPIRE

It was the biggest risk he had ever undertaken, and he was doing it without the support of his legendary father. Just five months before CITIC Pacific in March 2006 signed agreements to mine the Pilbara deposit, Rong Yiren died in Beijing, aged 89.

Rong had become a household name in China after 1949, when he remained in Shanghai and cooperated with Communist efforts to build a socialist economy. As the head of the family's flour-milling and textile empire, Rong was then estimated to be one of the 10 richest men in China, according to reports at the time. His only son, Larry Yung (Rong Zhijian in Mandarin) lived his early years at the family mansion on leafy Kanping Road in what had once been the French Concession.

Even under the Communists, Yung was extravagant. He drove a red open-topped sports car around the city and invited friends and classmates to dine at expensive restaurants, China's official media reported.

That all changed with the Cultural Revolution, when Red Guards ransacked the clan's homes, smashing and stealing valuable art and antiques. Rong was spared the brutality meted out to others with similar backgrounds. But he ended up working as a janitor, according to reports later published in the official media. Yung was forced to spend six years laboring in Sichuan Province after graduating from Tianjin University with a degree in electrical engineering.

With the end of the upheaval and Deng Xiaoping's rise to power in the late 1970s, Rong was rehabilitated. Deng tasked him with a key role in guiding China's opening to the global economy.

He set up state-owned China International Trust and Investment Corporation, now known as CITIC Group, as a vehicle to coordinate the massive foreign investment needed to jump start a shattered economy. His rehabilitation was complete when, in 1993, he was appointed to the largely ceremonial but prestigious position of Vice President.

RED CHIP PIONEER

As his father returned to influence, Yung moved to Hong Kong in 1978 and started an electronics engineering company with two cousins. He joined CITIC in 1986 before leading the takeover of an existing listed company and renaming it CITIC Pacific. The deal created one of the first "red chips," mainland-controlled companies with shares traded in Hong Kong.

CITIC Pacific gobbled up investments in aviation, property, telecoms, tunnels, bridges, power plants and mainland steel mills. The establishment Swire Group, a pillar of colonial Hong Kong, welcomed him onto the board of its airline subsidiary, Cathay Pacific, when CITIC Pacific became a major shareholder.

As the deals rolled in, the Yung family's links to the CITIC empire deepened. Two of his children, son Carl Yung Ming-jie and daughter Frances Yung Ming-fong, joined the company in senior positions.

The company's stock peaked at almost HK$50 in October 2007, valuing his 19 per cent stake at HK$20.9 billion ($2.7 billion) (The stock now trades at about HK$11.)

That year, Yung took home almost HK$67 million in pay, including a HK$48 million bonus, according to company filings.

CHINA'S RICHEST TYCOON

The silver-haired Yung fit seamlessly into the close-knit ranks of Hong Kong's super rich. He bought Birch Grove in Sussex, the former home of late British Prime Minister Harold Macmillan, for a reported 5.5 million pounds in 1989 and spent heavily adding a golf course. The house has since been sold.

Like other tycoons in gambling-mad Hong Kong, Yung invested in champion thoroughbreds and was elected a steward of the prestigious Hong Kong Jockey Club. Club records show 13 Hong Kong horses listed under his ownership won combined prize money of almost HK$100 million. By the time he began scouting for iron ore, China's official media was describing him as the country's richest tycoon.

His connections did him little good in the arid outback. Established players had already scooped up most of the best deposits of hematite, a rich form of iron ore, local miners say.

CITIC had little choice but to invest in plentiful deposits of lower-grade magnetite ore, which then accounted for less than 1 per cent of Australia's iron ore output.

In 2006, after Yung had visited Australia to explore potential investments, CITIC Pacific signed a deal for the right to mine up to 6 billion tonnes from the Pilbara deposit owned by Australian mining entrepreneur Clive Palmer.

Australian officials involved in the discussions say Yung was a confident and polished host. At a meeting in Hong Kong after the signing, Yung told his Australian guests he was flying to South America the following day on his private jet to hunt wild boar.

The Australian government approved the deal in June 2006. Within months, it became clear CITIC Pacific had underestimated the costs of establishing Australia's biggest magnetite mine. There were also unexpected management challenges.

COSTLY, UNRULY AND SCARCE

By Chinese standards, Australian labor is expensive, unruly and in short supply. Government and unions quickly dashed expectations an army of low paid Chinese workers could be imported to build the facility.

That irritated CITIC Pacific managers, who went public with critical views on local working conditions and habits. Then, in the midst of an Australia-wide mining boom, the price of energy, materials and engineering services soared. Complex projects in China had been completed much faster and at lower cost than similar projects in Australia.

"For a Chinese company coming to operate in Australia, this is a big issue," says metallurgical engineer Darryl Harris, a director of Perth-based Indo Mines who has also worked extensively in China. "The trouble is they can't transfer that know-how here."

With costs ballooning at Sino Iron, the Australian dollar began to rise on the back of soaring commodity exports. By July 2008, it had risen 25 percent since work started at the mine, effectively boosting labor and other costs by one-fourth for the company, which had borrowed from Chinese banks.

Facing the prospect of further currency losses, CITIC Pacific entered into a series of leveraged derivative contracts in June and July 2008 to hedge against the rising currency.

They struck deals with a range of banks, including Citibank, Rabobank, Standard Chartered, Natixis, Credit Suisse, Bank of America, Barclays Capital, BNP Paribas, Morgan Stanley, HSBC, China Development Bank, Calyon and Deutsche Bank, according to copies of contracts the company later disclosed.

Just as the contracts were signed, the global financial crisis hammered the Australian dollar in August of 2008, leaving the company holding wrong-way bets.

It wasn't until Sunday, September 7, 2008, five days before Lehman Brothers filed for bankruptcy, that Yung and his senior managers learned about the exposure, according to disclosures made later to the Hong Kong Stock Exchange. At the time, the Australian dollar was trading at about 81 cents to the U.S. dollar.

CITIC Pacific finally announced six weeks later, on October 20, that it faced losses of up to $2 billion on its hedging. By then, the Australian currency had sunk to 69 cents.

"Needless to say, this is a very unhappy event," Yung told a news conference that day.

POLICE, WATCHDOG INVESTIGATE

Yung blamed finance director Leslie Chang and financial controller Chi Yin-chau for failing to seek his approval for the trades and informing him of the potential risk. Both men had resigned, he added. Hong Kong newspapers later reported Yung's daughter, Frances, was demoted with a pay cut from her position in the finance department.

CITIC Pacific also announced its major shareholder, Beijing-based CITIC Group, had bailed it out with a $1.5 billion loan and would double its stake to 58 per cent in return for absorbing most of its liabilities.

Two days after the company came clean, the Securities and Futures Commission announced it had launched a probe into the delay in informing the market.

After examining documents handed to the market regulator, Hong Kong police mounted a separate probe. On April 3, 2009, detectives raided the CITIC Pacific office. Five days later, Yung and Fan resigned.

In the years since, CITIC Pacific has sparred with investigators. After first saying it would cooperate with the probe, the company began a legal effort to reclaim material handed to the SFC and seized in the police raid.

In two rulings last year, Hong Kong's High Court rejected the company's bid to claim legal privilege over the documents. The court found a prima facie case of conspiracy to defraud and of theft, and ruled the documents, including legal advice, had been produced to facilitate those alleged offences.

From stock exchange filings and court evidence, it is clear that between learning of the scale of its hedging losses on September 7 and informing the market in late October, managers made determined efforts behind the scenes to shore up company finances. Shareholders, however, were not warned

"CONSPIRACY TO DEFRAUD"

On September 16, 2008, CITIC Pacific informed the exchange about two unrelated mainland investments, but did not disclose the hedging losses senior management had learned about more than a week earlier. The board met on September 23 to discuss the crisis and directed its audit committee to begin investigating the hedging contracts, according to the two rulings.

In the following three weeks, the company borrowed HK$250 million from the bank of Tokyo-Mitsubishi, HK$1 billion from the Bank of China and HK$500 million from the Industrial and Commercial Bank of China.

Resolutions authorizing the borrowing were signed by the board's finance committee, including Larry Yung, Henry Fan, Peter Lee and Leslie Chang, according to evidence police gave the court.

Prosecutors said while securing the loans, CITIC Pacific's board sought legal advice on how long it could delay announcing the losses.

"They wanted to raise money without telling what their true financial position was," prosecutor Charlotte Draycott told the court. "This is a conspiracy to defraud."

In March, CITIC Pacific won a more favorable assessment from the Court of Appeal. It upheld the company's claim that some of the documents were privileged and thus unavailable to the prosecution. The court also disagreed with earlier findings of suspected criminal conduct.

Although police would have preferred to use the documents, the ruling does not undermine the case, people familiar with the investigation told Reuters.

PIPELINE OR PIPEDREAM?

As prosecutors ponder the evidence in Hong Kong, CITIC Pacific is intensifying efforts to end its suffering in the Pilbara.

On a recent day, the 4,000-strong work force raced to bring the mine into production. Plumes of dust whipped away in a hot dry wind as giant bulldozers sent slate-grey ore cascading down a stockpile behind a new power station and processing plant.

A 30-kilometer pipeline that will carry the ore snakes away from the processing complex through low scrub towards the coast at Cape Preston, where the company has built a port.

But even once shipments begin, it may take years for CITIC Pacific to dig itself out of trouble.

Reuters

China’s Self-Absorbed Nationalism

Beijing has long interwoven strands of victimization and self-righteousness into Chinese nationalism, which have made compromise more difficult.

The mid-August popular demonstrations in Chinese cities and accompanying media and internet commentary against Japan over disputed islands in the East China Sea put pressure on Chinese officials to be firm in protecting Chinese claims and countering Japanese "intrusions." 

They followed calls by prominent Chinese commentators and other constituencies for Beijing to adopt a tougher approach on territorial disputes in the South China Sea. 

Beijing in that case employed extraordinary measures including repeated use of security forces, economic sanctions, fishing and oil ventures, administrative fiats, diplomatic warnings, and other intimidating means short of military force in thus far successful efforts to cow Southeast Asian claimants and preclude ASEAN from taking a united stand in the face of China's power.

Foreign commentators are correct that a good deal of the impetus for popular and elite pressure for a tougher Chinese approach on territorial issues rests with the type of nationalism that has been fostered with increased vigor by the Chinese authorities since the end of the Cold War and the collapse of international communism. 

The nationalistic discourse emphasizes that since the 19^th century China has been treated unjustly and its territory and related sovereign rights have been exploited by other powers; China remains in a protracted process of building power sufficient to protect what China controls and regain disputed territory and rights. On the whole, the nationalistic discourse leads to a sense of 'victimization' by Chinese people and elites, who are seen having greater influence on China's foreign affairs decision making now that the strong-man politics of Mao Zedong and Deng Xiaoping have given way to a collective leadership that is more sensitive to nongovernment elites and popular views.

Image Building in Foreign Affairs

Unfortunately, the emphasis on perceived past and current victimization represents only part of the self-absorbed nationalism fostered by Chinese authorities. As important are the extensive efforts to build an image of China as a righteous actor on the world stage, different from other world powers seen to follow selfish pursuits of national interests. 

These efforts have been carried out by the Chinese foreign ministry, various other government, party and military organizations that deal with foreign affairs, ostensibly nongovernment organizations with close ties to Chinese government, party and military offices, and the massive publicity/propaganda apparatus of the Chinese administration. They boost China's international stature while conditioning people in China to think positively about Chinese foreign relations.

Thus, for example, China's foreign policy is said to follow principles in dealing with foreign issues that assure moral positions in Chinese foreign relations; principled and moral positions provide the basis for effective Chinese strategies in world affairs. 

Remarkably, such strategies are seen to insure that China does not make mistakes in foreign affairs, an exceptional position reinforced by the fact that the People's Republic of China is portrayed as having avoided publicly acknowledging foreign policy mistakes or apologizing for its actions in world affairs. 

Undoubtedly, some Chinese foreign policy officials and specialists know better and may privately disagree with the remarkably righteous image of Chinese foreign relations; but they don't depart from the official orthodoxy which is broadly accepted by elite and public opinion. Whatever criticism elites and public opinion register against Chinese foreign policy tends to focus on China being too timid and not forceful enough in dealing with foreign affronts.

Today, China's image building efforts support a leading role for China in Asian and world affairs, which enjoys broad support from the Chinese people and various constituencies in China; they forecast optimistically that China will follow benign policies emphasizing recent themes stressed by the Chinese administration. 

The themes include promoting peace and development abroad, eschewing dominance or hegemonism in dealing with neighbors or others even as China's power grows, and following the purported record of historical Chinese dynasties in not seeking expansionism.

Sacrificing Truth

Such image building in the nationalistic discourse of modern Chinese foreign relations is a lot further from the truth than the victimization depicted in Chinese discourse.  China was oppressed by various powers for much of the 19^th and 20^th centuries. 

In contrast, the evidence of a moral, principled, and benign approach has been the exception rather than the rule in the zig-zags of the often violent foreign relations of the PRC through much of its 60 years. This has been the case particularly in the area surrounding China in Asia, the region that has long been the area of greatest Chinese influence and the area that has received the lion's share of Chinese foreign attention. 

Most of China's neighbors have experienced intrusions or invasion by PRC security forces; they and others further away have contended with insurgent armies or armed proxies fully supported by China and targeting them. Such violence and excesses continued after Mao's "revolutionary" rule. Strong Chinese support for the radical Khmer Rouge increased in the later Maoist years and remained high throughout Deng's rule. 

During such turmoil, Chinese leaders avowed support for principles and righteousness in foreign affairs, but from the viewpoint of the neighbors and foreign specialists, the principles kept changing and gaps between principles and practice often were very wide.

In the post-Cold War period, China has tried with mediocre results to reassure neighboring leaders who well remember the violence and threatening Chinese practices of the past. China's recent truculent behavior in the South China Sea and in the East China Sea has recalled past Chinese efforts at intimidation and coercion. 

Part of the problem in Chinese efforts at reassurance is that Chinese elite and popular opinion shows almost no awareness of past Chinese violence and excesses, and therefore has little appreciation of the reasons behind the suspicion and wariness of many neighboring governments, and of the main outside power in the region, the United States. 

Regarding the latter, one other practice seen throughout the history of PRC foreign relations and supported by the strong nationalistic discourse in China has been to register strident opposition to efforts by outside powers to establish and sustain positions of influence and strength around China's periphery. Such moves, not just by the U.S. but also by the Soviet Union in the past and Japan and India up to the present, are repeatedly seen by Chinese authorities as well as supporting elite and public opinions in grossly exaggerated terms of being a threat to China, involving a revival of Cold War 'containment' or other schemes.

Implications

Chinese elite and popular opinion is strongly influenced not only by nationalistic discourse emphasizing China being victimized by other powers. As important, Chinese nationalistic discourse also involves a unique and strong sense of morality and righteousness in foreign affairs. 

As a result, Chinese opinion sees whatever problems China faces with neighbors and other concerned powers including the United States over sensitive issues of sovereignty and security as caused by them and certainly not by China. 

Thus, it has little patience with the complaints of other claimants and calls for China to compromise on sensitive issues involving sovereignty and security in nearby Asia. As a result, Chinese elites and public opinion push for tougher policies in defense of Chinese interests in the South China Sea and East China Sea. Chinese image building has successfully conditioned Chinese opinion, and this only adds to the difficulty of managing tensions in the seas near China and makes resolving those issues unlikely in the foreseeable future.

Robert Sutter is Professor of Practice of International Affairs at the Elliott School of International Affairs, George Washington University, Washington DC. This article was originally published by Pacific Forum CSIS PacNet here and represents the views of the respective author.

...

Diaoyu in Our Heart: The Revealing Contradictions of Chinese Nationalism

The same patriotic feelings that send Chinese to rally for national sovereignty over disputed islands might also explain their surprising and apparently conflicting answers to an online discussion.

Protesters carry banners reading "Declare War Against Japan" and "Japan Get Out of Diaoyu Islands" in Beijing. (AP)

There was another side to the anti-Japanese demonstrations that rocked Chinese cities this weekend, reacting to Japanese activists who had landed on a disputed island chain in the East China Sea. As Chinese protesters asserted their national prestige in ways symbolic and not, their countrymen on social media held a very different discussion on the Diaoyu Islands controversy. These two Chinese reactions, seemingly contradictory, hint at the contours and complexities of Chinese nationalism, and what it means for China both domestically and abroad.

A web user named oncebookstore posted a question on Weibo, China's twitter-style social network: "If your child were born on the Diaoyu Islands, what nationality would you pick for him/her: Japan, Taiwan, Hong Kong or the mainland?" (The islands, also known as the Senkakus in Japan, are claimed by China, Taiwan, and Japan.) 

It went viral on Sunday, retweeted over 20,000 times in nine hours before censors took it down around midnight. The surprising results would seem to contradict the popular anti-Japanese protests, undercut the government's efforts to stoke patriotism, and may well baffle outside observers: Chinese respondents overwhelmingly picked places other than mainland China. 

Around 40 percent answered Taiwan, followed by Hong Kong with about 25 percent, followed by Japan. Mainland China was the least popular option. A formal poll, set up on Weibo after the original post was pulled, returned similar results, with Japan at 20 percent and the mainland at 15.

Chinese will march in the streets to proudly declare their nation's sovereignty over these five rock-like, uninhabited islands, but when it comes to picking which flag could hypothetically adorn their child's passport, China comes last. How could that be? Judging by the surprise and disbelief in the poll's comment section, the result confuses even the Chinese themselves.

Though contradictory at first glance, the sentiment at the anti-Japanese protests and that revealed by the Weibo quiz are perhaps not as inconsistent as they might appear, and could highlight the dual nature of the nationalistic feelings deeply rooted in Chinese society today. 

The same Chinese nationalism that drives citizens to stand up for their native land when outside forces challenge it could also sharpen their pain when they observe the depressingly wide gap between China as it is and China as they wish it could be. Some of the Weibo poll respondents suggested that, although they might have grudgingly picked Taiwan or Hong Kong or even Japan for their child's hypothetical nationality, it wounded them not to choose mainland China as they wished they could. Therein lies the common ground between the nationalism of the Diaoyu marches and what you might call the national humility on display in the Weibo poll.

User wang-wei-bin confessed his conflicted feelings after answering the poll in a Weibo message: "Sigh. I picked Taiwan, but in fact I love this country. Just that I feel it doesn't love me."

"The reason I picked Japan is that I don't want to see my son becoming a traitor to his country like me," feiyuchuqing explained. "What terrible statistics," she said of the results to which she had contributed.

"If I had a girl I would perhaps pick Taiwan, and if a boy, Japan, but in any case I would always be waving the Chinese national flag on the rocks of the Diaoyu Islands," another user wrote in a response that had been widely retweeted before disappearing with the original quiz.

"Political slogans aside, as a citizen of the globe, I would rather have the next generation growing up in an place like Taiwan or Japan," said zuzhanggaocangwentai. "I don't want them to have to take poisonous baby formula, sit in brainwashing classes, and love the party that hurts its people."

Weibozhuanping also saw potential social advantage abroad: "If we speak about society instead of politics, Japan has the most fair and humane society. Workers and farmers won't have as hard a time there as they do in China."

"I vote for Taiwan," said yingdedaobie, "because that's where you get to vote."

In fact, web users' responses seemed to be driven more by a deep discontent with the current China than by a veneration for these more developed economies: a large number of participants put their answers as bluntly as "Anywhere but the mainland."

The popularity of the quiz and the heated discussion it engendered also provide a window into the Chinese public's struggle to reconcile the frustrating social realities surrounding them with the lofty patriotic ideals they have long internalized, partly as a natural result of living in one of the world's oldest and most storied societies, and partly through China's public education and mainstream discourse. 

These ideals have featured prominently in recent large-scale public protests against perceived foreign aggression: the NATO bombing of the Chinese embassy in Belgrade in 1999, controversy over Japan's tendentious history textbooks, a 2005 dispute over the ownership of the Diaoyu Islands, and as a reaction against the international demonstrations against China during the torch relay prior to the 2008 Olympics. 

These perceived foreign insults all brought Chinese national rage to a boiling point and monopolized domestic discourse for weeks. This time, however, as the familiar government rhetoric on the islands disputes rolls on, a large portion of the publicseems to be distracted by two sensational episodes of domestic disorder: the hunt for a high-profile and notorious serial killer, and the sentencing of a disgraced party official's wife.

As domestic woes increasingly surface in public discourse here (partly because the rise of social media makes them easier to discuss) and as China sometimes-uneasily engages with the world, Chinese citizens' perceptions of patriotism may be changing. 

In an essay titled "Patriotism with Chinese Characteristics," Li Chengpeng, a popular blogger and prominent social critic movingly described this struggle and transformation. Having long been a "typical Chinese patriot," as Li calls himself, he saw his beliefs challenged after witnessing evidence of corruption and government ineptitude during a trip to Sichuan after the 2008 earthquake. 

"My definition of patriotism changed," he wrote, "patriotism is not about bullying mothers of children who died in the earthquake, while calling for people to stand up to the foreign bullies of our motherland. ... [It] is about speaking more truth ... about dignity for the Chinese people."

Oncebookstore, the creator of the Weibo quiz, agrees. The owner of an independent bookstore in a southern Chinese province, he told me that his initial hope in asking the uncomfortable question was to make the public aware that "there are more pressing issues than the Diaoyu Islands."

"I hope Chinese people can show as much solidarity as they did in protecting the Diaoyu Islands every time someone is illegally evicted from his house by officials; I hope they can shout like they did to save the pro-China Diaoyu activists every time a Chinese dissident is arrested," he posted on his blog immediately after putting up the quiz.

"Farmlands, houses, and families, they should be the Diaoyu Islands in our heart."

The Atlantic