Abstract by Zhiyuan Cui

China's soft power and the global financial crisis

Right Before the G-20 meeting in London on April 2, 2009, Zhou Xiaochuan, the Governor of the Central Bank of China, published a paper titled "Reforming the International Financial System" in the website of the Bank. Though the People's Daily and the Xinhua News Agency have not picked up Governor Zhou's web-publication for official print, this article is widely discussed by the international financial community and is considered as a major example of China's soft power in the era of global financial crisis. I will argue that there are two main messages of the article which warrant special international attention. The first message is Zhou's implicit response to the charges of Ben Bernanke and Alan Greenspan that China caused the US financial crisis by recycling the current account surplus back into US; the second message is that the so-called "Triffin Dilemma" still exists today, therefore we need to let SDR play a more important role in the international payment system. However, the long term prospect of China's soft power depends on whether its economic and political system can gain more confidence and legitimacy in the eyes of the international community and its own people.