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An ever assertive China has a good working relationship with Iran and material leverage on Russia. Photo: Reuters

Can China's economic diplomacy translate into leadership?

Syed Munir Khasru says the exercise of its soft power has yet to pass test

As the dust settles on the recent summitry in the Asia-Pacific, pundits are still dissecting the outcome of the Apec, East Asia and G20 summits. However, one thing is clear: China, led by President Xi Jinping , has consolidated its position as the emerging leader in the region.

With negotiations continuing over the Asean-centric 16-member Regional Comprehensive Economic Partnership, Xi has cleverly commandeered the moral high ground by eliciting wide support for the more inclusive regional framework, the Free Trade Area of the Asia-Pacific, while being open to the US-backed Trans-Pacific Partnership. The latter, which excludes China, has been derided as an elitist club whose negotiation procedure is shrouded in secrecy.

While US President Barack Obama bagged a string of successes in his hectic tour to the region - reaching a landmark climate deal with China, reasserting the US position as a key player in the Asia-Pacific and reinforcing ties with stalwart allies like Japan and Australia - scratching the surface reveals that many challenges remain unresolved, including US-Japan relations over the stalled Trans-Pacific Partnership. By contrast, Xi's admittedly lukewarm handshake with Japanese Prime Minister Shinzo Abe still signalled a willingness to go down the path of cooperation.

China's two-pronged Silk Road initiative, including overland and maritime linkages, has won accolades from leaders across Asia. Many Asian nations are lining up behind the plan for an Asian Infrastructure Investment Bank and China is leading climate change mitigation efforts by announcing the establishment of a South-South cooperation fund to help developing countries move to a low-carbon economy. China is keener on fostering economic cooperation than building strategic alliances.

Two years into his second term, Obama's foreign policy is mired in hesitation, ambivalence and unexpected reversals. The US has yet to make any meaningful impact on the crises in Syria, Iraq, Ukraine or Nigeria. Inconclusive talks in Vienna on Iran's nuclear ambitions have only added to the growing frustration as the US takes one step forward and two steps back in projecting its presence in West or East Asia.

The sense of unravelling and chaos is filling the air, and the Republican-led Senate further weakens Obama's ability to steer his foreign policy forward.

In contrast, an ever assertive China under Xi has a good working relationship with Iran and material leverage on Russia, as reflected in the US$400 billion energy deal. While Russian President Vladimir Putin was given the cold shoulder at the G20 meeting and left early after a lonely lunch in Brisbane, he was received cordially in Beijing for the Asia-Pacific Economic Cooperation forum.

However, the rise of China has not been uniform. There is a debate over whether its successful economic diplomacy can be translated into normative leadership. The more China helps developing economies overcome their structural weaknesses and development constraints, the more its credentials as a leader will go up, but that is not the whole story.

Language and cultural issues act as a barrier to the projection of Chinese soft power. Stronger involvement in social and human development, knowledge sharing, and coming to the aid of countries devastated by natural or man-made disasters, are important parts of soft power which are not currently China's forte.

In addition, US defence spending is still more than three times that of China. It is not very clear, aside from Russia, who else in Asia is going to be China's strategic ally in practical terms. Countries like Sri Lanka or Bangladesh are possible choices.

Obama has reiterated that China is bound to rise in prominence and Washington is willing to work constructively with Beijing. Positive engagement between the world's top two economies requires mutual accommodation between the status quo hegemon and the aspiring leader. The game is far from a zero-sum one.

For the time being, Xi seems well poised to lead China to a global status in sync with its economic and strategic rise.

This article appeared in the South China Morning Post print edition as: Can China's economic might translate into leadership?
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