China's $3.3 trillion of currency reserves are a nice thing to have when you want to polish your image. Even if money can't buy you love, it sure can buy lots of positive buzz.
The most-populous nation has been throwing tens of billions of dollars at its prestige deficit for a decade, all part of an effort to enhance China's soft power, something of which the US, for all its crises, has a surplus. Why else do so many wealthy Chinese, and government reserve managers, see the dollar and the US legal system as a haven?
The priciest public-relations expenditure was the 2008 Beijing Olympics, which by some estimates cost $40 billion. The country has financed roads in Brazil, bridges in Zambia, power grids in Cambodia and mining rigs in Uzbekistan. It established Confucius Institutes for Chinese language and culture on 75 US college campuses. It started CCTV America to raise its profile.
The charm offensive served the Chinese brand well for a while. Its timing was perfect. China skillfully exploited America's distractions and travails after the Sept. 11 terrorist attacks. When Europe hit a debt wall 10 years later, it turned to Beijing for help, not Washington. When Wall Street needed capital injections at the height of the financial crisis, it knocked on China's door.
Squandered soft power
So it's perplexing, then, to watch China squander much of the soft power it accrued at great expense over many years in just a few months. The rate at which China is blowing an absolute fortune invested in prestige-enhancement makes Jamie Dimon's $2 billion loss at JPMorgan Chase & Co. look trivial. And it's all a bad omen for China bulls betting on smooth, 10 percent annual growth rates in the years ahead.
The world is used to Chinese bubbles. Only, the latest one isn't in stocks, real estate or rare-earth metals, but bad headlines: the Bo Xilai scandal, the diplomatic gymnastics over Chen Guangcheng, propaganda attacks on US Ambassador Gary Locke, tossing out Al Jazeera's lone Beijing correspondent and bullying the Philippines over a cluster of rocks in the ocean.
China can't seem to help itself. The reverberations reach the highest levels of government, reflecting a deficit of confidence in Chinese leadership. What a contrast to a few years ago when China's elites seemed to foster certainty and stability. Now China is realizing that money can't buy soft power; acting responsibly, rationally and civilly does.
There's an air of desperation in many of the unforced errors China is making. It's a clear sign that China isn't comfortable with all the attention and scrutiny accompanying its ascent on the global stage. It's also a stark reminder that the evolution of China's economy has raced far ahead of its opaque political system.
The Chen story is a bit of a sideshow. It's great that the blind activist may receive a passport this month that would allow him to leave for the US. It's probably where China wants him anyway.
Deeper, more meaningful insights can be gleaned from the Bo case. It's by far the biggest and most-telling political scandal the Communist Party has endured in decades.
The Bo imbroglio gets at everything China doesn't want foreigners chewing over, such as the obscene wealth of politicians and the bumps that seem to be accompanying this year's leadership change. All of it suggests that Beijing is struggling with its role in the spotlight when the world expected it to act like a mature and savvy power.
Many recent events suggest otherwise. Take the case of Melissa Chan, who had reported from China since 2007 for Al Jazeera English. China refused to renew her visa. It's widely suspected the denial was retaliation for the network's stories on secret jails and forced abortions. Will journalists have to engage in self-censorship to avoid deportation? Getting journalist visas, meanwhile, has become quite the ordeal for those eager to do actual reporting on the world's fastest-growing major economy.
Rising tensions in the South China Sea are also telling. Philippine stocks are gyrating daily on reports of naval exercises and a war of words over a group of rocks known as the Scarborough Shoal. Imagine how China will respond to more critical territorial disputes with Japan, South Korea and Taiwan. And China wonders why its Asian neighbors seek to balance its influence by cozying up to the US
These aren't the actions of a confident, secure power. Nor are China's increasingly obsessive efforts to control cyberspace. Here, the timing of Facebook Inc.'s initial public offering is a fascinating cultural footnote. Although Facebook's IPO may well be a technological watershed, China has decided to exclude itself. The biggest social-network site, run by the Mandarin-studying Mark Zuckerberg, isn't in the biggest Internet market. Why? Because Facebook is something China can't control.
That's what this is all about: internal control, something China's elites obsess over in normal times and are freaking out about as the country undergoes a once-in-a-decade leadership change. This is made even messier by the hunger to control the world's perceptions of China's rise.
What the Communist Party doesn't understand is that for the country to accrue soft power it should close the checkbook. Then it needs to treat its people and its neighbors with respect, and let all the world look on as it does.
William Pesek is a Bloomberg View columnist. The opinions expressed are his own.