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The Economics Behind China's Global Image

Updated On: Mar 16, 2007

Between Nov 06 and Jan 16, the BBC polled 28,000 people in its bid to carry out a worldwide survey of attitudes towards 12 major countries.

From the survey, Japan emerged as the second most positively viewed country while China fared less ideally, coming in 6th on the scoreboard.

Old war adversaries such as the US, Britain, Canada, and the Philippines appear to be largely unperturbed by Japan's partial denial of atrocities committed during World War II.

The Chinese and South Koreans remain the exception. Chinese media continues to criticize Japan's attempts to downplay its culpability in the war. In recent weeks, the latter has lashed out at Japan's Liberal Democratic Party's continual efforts to remove references to Japan's wartime sex slaves from most authorized history texts for junior high schools.

Despite Chinese protest, Japan has gotten off largely unscathed. The Chinese on the other hand, have more to work on, with regards to changing its image to the world.

The BBC survey concluded that almost half of all Americans and 60% of the French, Germans and Italians believe China has a negative influence on the world.

In the two recent China-US related events—China's efforts to persuade North Korea to agree to a negotiated solution to its nuclear standoff with the US and, America's record trade deficit with China—one is inclined to assume that the threat of Chinese exports far overshadows any appreciation of China's attempt to alleviate the nuclear standoff.

Similar to the Americans, the Europeans' negative perception of the Chinese stems largely from fears of economic competition. In a recent interview with German weekly Der Spiegel, Boeing boss James Mcnerney spoke of the impending commercial threat China might pose. Mcnerney credited the Chinese for having “well-trained people, a strong spirit of enterprise and an enormous domestic market.” Such acknowledgement of Chinese enterprise could be a welcome challenge for some. It could also create unease in others, sowing the beginnings of the call for increased protectionism.

In 2006, China's surplus with its two most important trade partners, the US and EU, reached US$144bn and US$92bn respectively. (These numbers understate the true size of the surpluses as they have not taken into account the goods that were routed via third-party countries.) China is overwhelmingly dependent on the US and the EU. The two markets together, absorb more than 40% of China's exports. Should protectionism increase, the impact on China could be acute.

The Chinese government has made attempts to correct this surplus. For example, it is cutting down on export tax rebates and actively encouraging more imports of industrial equipment. The US and the EU however, have tended to dismiss these actions as baby steps. They question the lack of dramatic action to correct the widening imbalance. Some even conclude that China is keen on maintaining its current advantageous position over the US and the EU. Any progress in convincing China's trade partners of its attempt to stem the outflow of exports has been minimal.

China's occasional outbursts of nationalist sentiment have also not served to improve global perceptions of the nation. In Beijing, a lawmaker is lobbying for the removal of a Starbucks coffee house from the Forbidden City on the grounds that the American establishment is an affront to Chinese culture and tradition. Jiang Hongbin, a representative of the north-eastern province of Heilongjiang at the National People's Congress asserted that “Starbucks must move out of the imperial palace immediately, and it can no longer be allowed to taint China's national culture.”

Jiang Hongbin may succeed in removing Starbucks from the Forbidden City. Similar personalities in the US too could possibly succeed in restricting the flow of Chinese imports, on account that it causes severe damage on the US's economic well-being. To prevent mutual nationalist retaliation, China needs to re-examine its approach to resolving the trade imbalance. Long term policies that boost domestic consumption and imports cannot be avoided. These are the tools that could potentially convert entrenched negative global perceptions.   (15 March 2007)

Sources:

Global image of Israel and Iran most negative  (Straits Times, 14 March 2007)

Boeing chief executive warns of commercial threat from China (ChannelNewsAsia, 11 March 2007 )

Starbucks 'taints China's culture’ (Channelnewsasia, 12 March 2007)

China warns against US protectionism' (Straits Times, 13 March 2007)

A Dangerous Perception Gap, (South China Morning Post, 14 Mar 2007)

`Sex slave history erased from texts; '93 apology next?' (The Japan Times, 11 Mar 2007)