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China wages 'big-bucks diplomacy'

Iceland banned followers of the Falun Gong from entering the country during Jiang's visit
Iceland banned followers of the Falun Gong from entering the country during Jiang's visit  

Willy Wo-Lap Lam
CNN Senior China Analyst

HONG KONG, China (CNN) -- "When you have lots of money, you can afford to huff and puff," Deng Xiaoping liked to say before he lapsed into senility in the mid-1990s.

The late patriarch was referring to the powers of the market economy.

And while Deng asked his followers to take a low international profile so China could concentrate on making money, the eastern giant seems to be throwing its weight around the global stage thanks to its newfound wealth.

In a glaring instance of money-aided "great power diplomacy," Iceland banned followers of the Falun Gong spiritual sect -- which is labeled an "evil cult" in China -- from entering the country during President Jiang Zemin's visit last week.

Reykjavik turned away at least 60 Falun Gong members, saying it did not have enough police to protect the Chinese VIP.

The move led to angry remarks from the U.S. State Department, as well as protests by human rights groups, who said Reykjavik had bowed to Chinese pressure and put economic benefits above its commitment to global norms on civil rights.

But this is not the first time that Beijing has used the business card to score diplomatic points.

The year 2002 marked the first time the Geneva-based United Nations Subcommittee on Human Rights did not sponsor a resolution condemning China's human rights records.

With the United States no longer a member, no European country was willing to take the heat -- and the threats of Beijing withdrawing trading and investment opportunities.

Bullying tactics

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The Chinese Communist Party (CCP) leadership first demonstrated what its critics called bullying tactics in 1997, when Denmark was bold enough to move a resolution slamming Beijing's treatment of dissidents and ethnic minorities.

At that time, a spokesman of the Chinese Foreign Ministry said: "This anti-Chinese resolution will, I think, in the end become a rock that smashes on the Danish Government's head."

Beijing went on to cancel all commercial contracts with the Scandinavian nation. A year later, Copenhagen, and quite a few other European capitals, apparently wised up.

Since then, the CCP administration has dangled supposedly lucrative trading and investment prospects to achieve a plethora of goals.

These include efforts to persuade E.U. members not to sell arms to Taiwan, or to take a line on Iraq -- and the Muslim world in general.

Beijing's fairly successful deployment of renminbi diplomacy, as much as winning the bid to host the 2008 Olympics, is evidence that what Napoleon called the "sleeping giant" is awake and kicking.

China economy
Critics say China is using its economic might to pressure countries to bend to its demands  

With China's GDP posed to overtake France's this year -- and that of the United Kingdom around 2005 -- the Asian giant is expected to flex its diplomatic muscle more vigorously.

To a large extent, of course, all nations use economic tools such as trade, investments or the export of rare materials as foreign-policy levers.

And it may be a good sign if Beijing has decided to use "cash diplomacy" rather than its fast-developing military arsenal to achieve objectives such as national reunification.

'Cash diplomacy'

For example, tension in the Taiwan Strait will be lowered if CCP leaders are convinced that attractions -- such as a 1.3-billion-people market -- are sufficient to attain economic and ultimately political integration with the "renegade province."

After all, around one million Taiwanese -- including business moguls and IT professionals -- are already living in coastal China.

And the cause of peace may be advanced if a business-comes-first leadership in Beijing is persuaded that force is no longer that necessary.

However, in waging big-bucks diplomacy, Beijing has to bear in mind that economic might does not necessarily make it right.

In fact an excessively aggressive use of this strategy could backfire.

Given the non-transparent if not dictatorial political system in China, it is easy for critics -- particularly those in countries that feel jostled by the rising giant -- to argue persuasively that an economically strong China will build up a threatening army and strut about the world stage in an arrogant manner.

Beijing's cynical deployment of the business card seems to have fed the "China Threat" theory in America.

And this is one reason why despite Beijing's legions of diplomatic and intelligence personnel in America -- and its multi-million dollar lobbying budget -- out-gunned Taipei seems to be winning more sympathy among U.S. congressmen, non-government organizations (NGOs) and editorial writers.

Beijing's crude display of economic muscle has also fanned a similar version of China Threat in Japan, China's nervous neighbor -- and erstwhile foe.

Beijing believes the rise of right-wing, quasi-militaristic forces in Japan alone is to blame for the dramatic growth of anti-Chinese sentiments among the Japanese public.

Money isn't everything

Even Taiwan, which is most susceptible to the magnet called the China market, has demonstrated that money isn't everything.

Last December's parliamentary elections -- in which pro-independence politicians made unexpected gains and President Chen Shui-bian showed staying power -- suggests that coastal China's affluence may not necessarily inspire respect, let alone a passion for political union.

Recent setbacks in Beijing's ties with America and Japan -- as well as an impasse on the Taiwan front -- has highlighted the old argument that to be a responsible world power, a country has to do more than chalk up a 7% growth rate year after year.

An aspiring superpower also needs some strong claims to a moral high ground that is based on recognized international norms.

After all, in his treatises on governance, Confucius laid much more store on moral authority than economic prowess or brute military force.

It is also instructive that in the mid-1980s, China's heyday of political reform, the avant-garde Shanghai newspaper World Economic Herald ran a series of articles on the issue of qiuji, or membership in the community of nations.

The liberal paper's conclusion was that to earn its place in the sun, China must, in addition to an economic leap forward, attain high standards in areas such as political liberalization and human rights.

Jiang, then mayor of Shanghai, won Deng's praise for "ideological rectitude and resoluteness" for suppressing the Herald even as students in Shanghai and Beijing campuses were holding unprecedented large-scale pro-democracy demonstrations.

It is perhaps difficult for Jiang, whose spirits must have soared above the Icelandic volcanoes last week, to appreciate the fact that economic or military clout needs to be tempered with a Confucianist -- or "Western" -- precept of morality and democracy.

For every government bureaucrat or business leader that has been cowed by China's renminbi power, however, considerably more parliamentarians, NGOs or ordinary citizens may be buying the China Threat theory.




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