How serious is the Chinese challenge?

Is China the benign emerging market with limited regional aspirations that Beijing is so anxious to portray? Or is it an increasingly powerful, assertive economic and strategic force that will increasingly challenge Europe, America and Asian neighbours?

The West has a long history of crying wolf about China, beginning with the 19th century Yellow Peril scare. More recently fears of China reflect European and US self-doubt about their ability to maintain the current standard of living in the face of Chinese competition. Anxiety is also driven by neoconservative need to have an enemy to mobilise public support for US defence spending and continuation of American global hegemonic influence. Moreover, such fears ignore China’s daunting development needs, including hundreds of millions of people still living in harsh poverty.

Nevertheless, evidence in recent months suggests growing Chinese self-confidence, with a capacity and an unprecedented willingness to exert leverage in the world. This should come as no surprise. History teaches that rising powers flex their muscle and test influence. Europeans, Americans and China’s neighbours do not necessarily need to be afraid. But they do need to be wary.

Beijing’s new assertiveness is fueled by its unprecedented economic success. The Chinese economy has doubled in size during the last seven years and per-capita income has doubled in six years.

This economic performance has led the Chinese to be the most self-satisfied people in the world, according to the recent Pew Global Attitudes survey. Nine in 10 Chinese are happy with their country’s direction, feel good about the current state of their economy and are optimistic about China’s economic future.

And the rest of the world increasingly sees China as the emerging economic superpower. In that same Pew survey of populations in 22 nations, majorities or pluralities in eight countries picked China as the world’s leading economic power, compared with people in only two nations who felt that way in 2009. Half the Germans, Jordanians, Japanese, French and Americans now assign the top spot to China.

Since 2009, in 13 of the 21 countries for which trends are available, the portion of the public that views China as the world’s leading economic power has grown sharply, including increases of 29 percentage points in Japan, 23 in Germany and 21 in Jordan.

And China seems increasingly willing to use its rising stature to exercise leverage over diplomatic, security and economic issues.

There is no more kowtowing to the United States. When US President Barack Obama visited China in November 2009, his principal public event in Shanghai, a town-hall meeting with students, was broadcast only on local TV, not nationwide - unlike a famous town-hall meeting that Bill Clinton held in China during his first visit as president. Moreover, press reports at the time censored the content, as did Chinese newspaper editors with an Obama “Southern Weekend” interview.

At the Copenhagen Climate Summit in December, Chinese Premier Wen Jiabao failed to attend an initial meeting with Obama, sending a lower-level official in his place. At one point, Obama was subjected to a finger-wagging lecture by a high-ranking Chinese official, which would have provoked an international incident had an American treated the Chinese leader in such a manner.

Beijing has turned aggressive on trade and investment matters, demanding that foreign companies patent technologies in China and adopt Chinese standards if they want to sell in the Chinese market. It has also brought trade cases against Western producers who sell in China.

On the political front, Chinese officials have begun an expansive assertion of China’s national sovereignty. Beijing has long claimed that Tibet and Taiwan are “core national interests” and foreigners should keep out of these “internal affairs”. Now Chinese have begun to apply this diplomatic term to the South China Sea, a 1.2 million square mile area through which flows at least a third of global maritime commerce and more than half of Northeast Asia’s imported energy supplies. Beijing’s assertion threatens fishing and oil-exploration interests of Vietnam, Taiwan, the Philippines, Indonesia and Malaysia, and naval transit interests of the US, Japan and South Korea.