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Infographic Of The Day: China's Checkbook Diplomacy

We hear incessantly about the rise of China. So much so that it’s all a bit too abstract: What does it mean that China’s has become a global force? And more importantly, how have they actually accomplished that?

The quick answer? Through business dealings rather than military alliances, and a superb infographic from the Heritage Foundation offers a rarely seen snapshot of that.

I say rarely seen because The Heritage Foundation boasts that it possesses the only database of China’s global investments, and they’ve actually made it available for public consumption. The charts elegantly show the various sectors that China is investing in around the globe, and where they’re doing it. The most obvious thing that’s happening: China is using partners from around the world to secure the raw materials it needs to grow. It’s investments abroad aren’t in technology or industry; they’re in metals and energy and power.

Here are their investments around the world in energy:

[Click to visit interactive version]

And in metals:

The more you look at this chart, the more you start seeing powerful forces at work. For one, you’ll notice that majority of China’s trading partners aren’t in Europe or America: They’re in Asia and Africa and South America. In other words, precisely those countries which have always spoken last on the world stage. China is using its economic relationships to create an alternative bloc of power, which can directly compete with the political might of the E.U. and America.

You could call it checkbook diplomacy, and it’s vastly different than the bedrock of our own diplomatic efforts. Granted, the U.S. does use its economic relationships abroad as a carrot, but the stick has always been our armed forces. China, by contrast, isn’t exactly threatening countries overseas with potential military action (with the exception of Taiwan, of course). Instead, it’s doing hundreds of billions in business with countries that are usually also-rans on the global stage. Look, for instance at its dealings with little old Australia:

The one country that China is pointedly not investing much in is America. Instead, the only thing they’re doing is buying our debt and holding our currency. Here are their investments in the States:

And here is a look at what currencies draw their attention; it’s almost exclusively our own:

This is profoundly clever stuff. China has neutralized our power to oppose it by holding so much of our debt. And it has simultaneously drawn other countries closer to its bloc of power by offering them a taste of its rocketing economy.