Wednesday, 22 July 2015

Housing and the failure of Chinese soft power

Any country can grow strong enough to project military power, it is spreading of ideas that’s difficult. And if the current housing crisis is any indication, China is discovering the limits of its ideas.

There are two kinds of geopolitical power in: soft and hard, carrots and sticks. They are extensions of each other. In the game of nations, all the pieces on the board are nation states. Those pieces are moved through hard power – masses of men and metal at the right place and right time.

Hard power is something most large countries can achieve. If another country is an ally, it was the promise of masses of men and metal; and if they are an adversary, it was the threat of masses of men and metal. Parking an aircraft carrier off the coast of a belligerent nation is a sure way to calm tensions. But it isn’t a long term strategy.

The US has spent the last half century parking aircraft carriers around the globe wherever flashpoints appear. Billions of dollars are spent annually on securing this precious world system. But it is how that system was developed which displays the true extent of US power.

The current world system is a cascade of Western ideas nested in processes interacting with clear rules and expectations. It is a US-delivered framework of default assumptions about what it means to be wealthy, how to think about problems, how a free government looks and many other aspects. It is a system adopted and evolved from the preceding British hegemony priding rationalism, science and democracy above the alternatives.

Most people living today take this structure for granted, not because it is biological, but because of the incredible reaches of soft power. Not only does soft power seep into the physical world, it crawls inside human brains through television, history and discussions making the ideas appear natural.

In 2015, US soft power is so strong that competing systems find it unconsciously necessary to employ some parts even while they attempt to usurp it. For instance, Chinese businessmen do not attend high-level meetings wearing traditional Chinese clothing, they choose instead a three-piece suit. This should tell us something.

This century the Chinese economy has grown phenomenally fast, closing in on parity with the US economy. With this new-found power has come the attendant purchases of an aircraft carrier, a blue-water navy, a modern air force and other projection capabilities. These are relatively simple hard power purchases to make, even if they are expensive.

The trick will be whether China can develop a viable alternative to the present US soft power system. After all, it’s easy to shout about the evils and realities of an overarching system, but shouting achieves nothing. The system isn’t afraid of the truth, it is only afraid of a more effective lie. Soft power is what China will need to develop if it is to nudge the US system from its perch.

But as of yet, Chinese soft power is dismally lacking. The Chinese way of doing business is almost never appreciated around the world, even in the destitute and backwards nations of Africa. There is no incentive to choose the Chinese way if it requires too much change, which it often does.

In New Zealand, this dynamic emerges in the purchasing of Auckland homes. Buyers from the US are probably involved in similar purchases, but rarely are Americans blamed for the rising prices. Yet when Chinese buy New Zealand houses in great quantities, the backlash is pronounced. This is not necessarily an issue with Chinese citizens, it is in great part a failure of Chinese soft power.

If it were seen as more acceptable for the Chinese to buy thousands of houses, or the characteristics of Chinese investment were more widely utilised, then an influx of capital from China wouldn’t be as controversial.

For the US to invest in New Zealand would be at minimum unusual and at most entirely expected. For Chinese to invest in New Zealand it will take a few more generations to become normal. Effective soft power takes time and immigration is a big factor, so maybe the Chinese are on to something here after all.

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