The United States exceeds the People's Republic of China (PRC) in global trade, and far surpasses China in GDP and foreign direct investment. It continues to be the dominant external political and military actor in the Middle East and political and economic influence in Latin America. It maintains robust, formal alliances in Europe and Asia, and far outweighs China in military spending and capabilities. Foreign policy observers have raised several issues related to the U.S. use of soft power tools: Some experts argue that the United States has neglected public diplomacy, particularly in helping to shape foreign perceptions of American policy. By some indicators, China's rising soft power may have experienced some recent setbacks, while the U.S. image has shown signs of a possible renewal. The United States possesses latent reserves of soft power. Each country deploys its power, however, in different ways. These include the following:
large international tasks are most effectively tackled with large international coalitions for financial, physical, as well as political support; future wars involving the United States may well be asymmetrical and involve soft power—a combination of military operations (against conventional as well as insurgent forces), reconstruction, governance, and winning the hearts and minds of people; threats to U.S. security have become "democratized"—whether a single person, a group, or an international network, all can potentially damage American people or assets; budget constraints are real both in terms of opportunity costs and for financing foreign operations; countries are placing more emphasis on national sovereignty—not just guarding against outside incursions but, for some nations, rigidly controlling humanitarian interventions or opposing foreign assistance to local non-governmental organizations for political reasons; as democratic institutions and societies become more entrenched (particularly in developing nations), public opinion, nationalism, and attitudes become large moving forces for governments (even autocratic governments use nationalism to bolster public support); international relations requires dealing not only with governments but with the perceptions and attitudes of people under those governments; globalization and technology have shrunk geographical distances among countries and created more economic interdependence; communications networks have so linked people of the world that everything seems to have a public face; that face often can be distorted according to the interests of those in the network; and the rise in prices of commodities (particularly petroleum) and the U.S. trade deficit are redistributing wealth away from the United States and other industrialized nations toward commodity exporting nations (many are either politically unstable or located in unstable regions) and toward China. The countries in which Chinese soft power competes most directly with that of the United States fall into three categories: the arc of instability stretching from North Africa through the Middle East and into South Asia, other countries in play (Southeast Asia, Latin America, Sub-Saharan Africa, and Central Asia), and new (and re-emerging) centers of power, the so-called BRICs (Brazil, India, as well as Russia and China, for U.S. soft power). PART TWO: COMPARISONS OF U.S. AND PRC INSTRUMENTS OF HARD AND SOFT POWER

	Diplomacy and Foreign Assistance

The following section examines three aspects of non-economic soft power—public diplomacy, state diplomacy, and foreign assistance. The 110 th Congress has held hearings and proposed measures that support U.S. public diplomacy, diplomatic efforts, and foreign aid. (March 8, 2007 and June 25, 2008) The Implementing Recommendations of the 9/11 Commission Act of 2007 ( P.L. The Public Diplomacy Resource Centers Act of 2007 ( H.R. Debt forgiveness is also a major form of PRC foreign aid. China's concessions include Block No. China's sovereign wealth fund potentially could provide Beijing with another instrument to project its soft power around the world. This void has been filled in part by China's growing soft power. U.S. According to one U.S. analyst, these grants are indicative of China's increased military diplomacy activities in developing countries worldwide since the early 2000s. The People's Republic of China (PRC) uses a combination of political and economic means to protect this trade and foster bilateral ties. While the United States remains the dominant external political and military actor in the Middle East, the decline in public support for U.S. policies in many Arab states and Chinese efforts to establish broad commercial linkages across the region have strengthened China's position relative to the United States in some non-official channels.
This report compares the People's Republic of China's (PRC) and U.S. projections of global influence, with an emphasis on non-coercive means or "soft power," and suggests ways to think about U.S. foreign policy options in light of China's emergence. Part One discusses U.S. foreign policy interests, China's rising influence, and its implications for the United States. Part Two compares the global public images of the two countries and describes PRC and U.S. uses of soft power tools, such as public diplomacy, state diplomacy, and foreign assistance. It also examines other forms of soft power such as military diplomacy, global trade and investment, and sovereign wealth funds. In Part Three, the report analyzes PRC and U.S. diplomatic and economic activities in five developing regions—Southeast Asia, Central Asia, Africa, the Middle East, and Latin America.
China and the United States use tools of soft power in different ways and with varying effects. Since the mid-1990s, the PRC has adopted an increasingly active and pragmatic diplomatic approach around the world that emphasizes complementary economic interests. China's influence and image have been bolstered through its increasingly open and sophisticated diplomatic corps as well as through prominent PRC-funded infrastructure, public works, and economic investment projects in many developing countries. Meanwhile, some surveys have indicated marked declines in the U.S. international public image since 2002. Some foreign observers have criticized U.S. state diplomacy as being neglectful of smaller countries or of countries and regional issues that are not related to the global war on terrorism. According to some experts, U.S. diplomatic and foreign aid efforts have been hampered by organizational restructuring, inadequate staffing levels, and foreign policies that remain unpopular abroad.
Despite China's growing influence, the United States retains significant strengths, including latent reserves of soft power, much of which lie beyond the scope of government. Furthermore, by some indicators, China's soft power has experienced some recent setbacks, while the U.S. image abroad has shown signs of a possible renewal. The United States exceeds the People's Republic of China (PRC) in global trade, although the PRC is catching up, and far surpasses China in GDP and foreign direct investment. It continues to be the dominant external political and military actor in the Middle East and political and economic influence in Latin America. The United States maintains formal alliances in Europe and Asia, and far outweighs the PRC in military spending and capabilities.
The 110th Congress has held hearings and proposed measures that support U.S. public diplomacy, diplomatic efforts, and foreign aid. Relevant legislation includes the Implementing Recommendations of the 9/11 Commission Act of 2007 (P.L. 110-53) and the Public Diplomacy Resource Centers Act of 2007 (H.R. 2553).
This report will not be updated.