CRS also found that China’s cumulative stock of foreign direct investment (FDI) worldwide amounted to just $73.3 billion at the end of 2006 — 0.58% of global FDI.
In addition, America’s private sector leaves a “substantial global footprint” sometimes overlooked by those comparing only government directed overseas initiatives. Aside from US business interests these include such diverse products as schools, newspapers, journals, banks, movies, TV programs, novels, rock stars, medical institutions, politicians, religious groups, and non‐governmental organizations.
The study also found that there is little agreement on whether China marshals its “soft‐power” assets as part of a pragmatic, overarching strategy. Nobody is sure whether China makes decisions in general terms, with regard to specific regions or countries, or whether it is just a series of marginally related tactical moves to seek normal economic and political advantages. Of course, as the study notes, similar questions could be raised about the overall US approach to China.
The fact that China uses soft power does not, however, mean they are disconnected form hard power goals. The study notes that in all three of the regions — Latin America, Asia‐Pacific and Sub‐Saharan Africa — discussed, where China is most active, access to energy resources and raw commodities to fuel China’s domestic growth plays a dominant role in Beijing’s activities.
China has oil and gas exploration contracts with Brazil, Ecuador, Bolivia, Colombia, Venezuela and Cuba; oil contracts and pipeline deals are a major part of China’s activities in its relations with Central Asian states such as Uzbekistan and Turkmenistan, and China’s oil exploration interests extend to Burma, Vietnam, and Malaysia. Imports of crude oil constitute the bulk of China’s imports from African states.
China also deploys its soft power as part of the political dynamic of trying to separate Taiwan from its remaining diplomatic relationships, although this dynamic varies according to region. While it is important in China’s African relationships, it is not important in China’s relations with Central Asian countries, where Taiwan has no official diplomatic relations. It is a negligible factor in China’s relationships with Southeast Asian countries, where Taiwan has significant economic interests but no diplomatic ties.
But the Taiwan‐China competition looms large in China’s relationships in Latin America and the Caribbean. The region’s proximity to the US mainland allows Taiwan’s president and senior leaders to ask for symbolically meaningful transit stops in the United States when making official visits to western hemisphere countries. A significant reduction, or even the disappearance, of Taiwan’s Latin America and Caribbean relationships could greatly impair this US connection.