US public diplomacy has morphed the Liu case out of the soft power human rights community into the hard power arena of economic warfare designed to pressure Beijing to devalue the Yuan and give Democrats badly needed credibility, votes and dollars in the run up to US midterm elections.

The Chinese government continued its vilification campaign against the awarding of the Nobel Peace Prize to a jailed dissident, Liu Xiaobo, by canceling another meeting with Norwegian officials and lambasting the award as an affront to the Chinese people and a ploy to try to change the country’s political system.

The announcement of the Norwegian Nobel Committee provided an upset ending for a week of public diplomacy by China in Europe. Chinese Premier Wen Jiabao had toured European capitals showering goodwill and lucrative investment deals for cash-strapped European economies.