Spending won't make China's Asia dream come true

After two years of waxing poetic at home about a “China Dream”, Xi Jinping wants to enchant the entire Asia region — and is dangling $1.25 trillion to make sure he does.

"China's development will bring huge opportunities and benefits to the Asia-Pacific and the world,” President Xi told business leaders in Beijing on Sunday. “We are willing to work with others to realise the Asia-Pacific Dream."

So far, though, it seems Xi only wants to pay the region to realise that China has Asia's back in ways that Barack Obama's America and Shinzo Abe's Japan can't afford. That $1.25 trillion is the total in outbound investments China plans to make over the next 10 years. Beijing is also lavishing $40 billion to recreate the Silk Road to bolster trade with Europe. A $50 billion infrastructure fund will make the World Bank and Asian Development Bank look like archaic vestiges of a bygone geopolitical age. And China's Free Trade Area of the Asia-Pacific is timed to rival the US-led Trans-Pacific Partnership.

But Beijing's financial charm offensive lacks one crucial element: love. Its $4 trillion of currency reserves and rapid growth buys China lots of attention and any meeting it wants — just not the affectionate "soft power" it craves. This won't come via spending or from China's rising clout. It will come from actions worthy of a more mature, reasonable and civil global stakeholder.

China is embroiled in territorial disputes with Vietnam, the Philippines and several other members of the Association of Southeast Asian Nations, or ASEAN (Japan, too, of course). These entanglements often do more harm than Beijing's largesse helps. The same is true of Beijing's moves to scrutinise foreign companies from Microsoft to Toyota, silence the international media and police cyberspace. China's heavy-handed response to Hong Kong's pro-democracy movement hardly projects secure, confident power. 

Genuine affection comes from acting in partnership with Asian neighbours, not buying their loyalty with the odd multi-billion-dollar dam, bridge, road or power grid. For years, China tossed money at unsavoury regimes and looked the other way as environmental and labor protections were ignored. Yet if China wants to buttress its soft power, it should consider following the Japanese model.

No, huge infrastructure projects aren't altruism. But Japan has long provided governments like India or Indonesia the money and technical expertise to upgrade their own infrastructure in ways that enrich local economies. That means using local materials and labour, as opposed to Beijing's preference that countries import both from China. 

Before Xi can realize his Asia-Pacific Dream, he has to define it. Even many of his 1.3 billion people are confused about what their domestic China Dream entails. Xi's broader dream lacks both clarity and the toolkit necessary to win Asia's love. Much of emerging Asia may want China to lead regional economic development, but that can't happen until Asia's largest economy reconsiders its inward-looking political and military policies.

Courtesy: Bloomberg