Foreign policy observers often attribute China's growing influence in Southeast Asia, and other parts of the world, to its use of "soft power"—diplomacy, foreign assistance, trade, and investment, and the view of China as a vast, potential market. As part of its "charm offensive" in the region, the People's Republic of China (PRC) has projected a "benign national image" through adopting a more accommodating foreign policy, actively participating in regional organizations, providing significant amounts of foreign assistance, and boosting its economic ties, with considerable benefits accruing to Southeast Asian states. According to some analysts, China's rising soft power has become all the more striking in relation to tepid or inconsistent U.S. attention to the region. The term "soft power," as originally conceived by Harvard Professor Joseph Nye, Jr., referred to the ability to affect the behaviors of other countries by attracting and persuading others to adopt one's goals. By contrast, "hard power" was described primarily as military might. The United States has exerted both hard and soft power in Southeast Asia. In terms of soft power, many Southeast Asian peoples historically have been attracted to U.S. popular culture, democratic values and institutions, human rights policies, free market system, high living standards, technological advances, and internationally renowned institutions of higher learning. The United States also remains influential as a large market for Southeast Asian exports. However, according to some indicators, in the past decade, many of these forms of U.S. soft power have declined in both absolute and relative terms. For many analysts, China's growing influence or soft power in Southeast Asia and elsewhere is mostly economic rather than military (hard power), cultural, or political. China's growing ability to affect the actions of state actors largely stems from its role as a major source of foreign aid, trade, and investment. The PRC has also wielded power in the region through diplomacy and, to a lesser extent, admiration of China as a model for development and ancient culture, and an emphasis on "shared Asian values." In addition, overseas Chinese communities have long played important parts in the economies, societies, and cultures of Southeast Asian states. Along with offering economic inducements, China has allayed concerns that it poses a military or economic threat, assured its neighbors that it strives to be a responsible member of the international community, and produced real benefits to the region through aid, trade, and investment. China may be gaining on the United States in the areas of cultural and political soft power as well, at least in some countries in the region. A 2007 Pew Research poll found that only 29% of Indonesians and 27% of Malaysians polled had a favorable view of the United States as opposed to 83% of Malaysians and 65% of Indonesians who had favorable views of China. Americans themselves are more popular than their country, with 42% of Indonesians having a favorable view towards Americans in 2007. The figure for Indonesia is up slightly from a favorable view of only 15% in 2003 but remains well below the 2000 rate of 75%. One striking exception to this trend is the Philippines, which ranks first in the world in trusting the United States to act responsibly in global affairs, according to a 2007 survey. Such trends in polls led Joseph Nye to state that "... although China is far from America's equal in soft power, it would be foolish to ignore the gains it is making.... It is time for the U.S. to pay more attention to the balance of soft power in Asia." China's Diplomacy in Southeast Asia China's posture in Southeast Asia has undergone a transformation in the past decade. The PRC's support for various communist insurgencies in the region during the Cold War, its military response to Vietnam's incursion into Cambodia in 1979, and its forceful claims to disputed islands in the South China Sea during the 1990s, created strains with its neighbors in the region. However, since the Asian financial crisis of 1997, China increasingly has emphasized mutual benefits, or soft power over hard power, or the threat of hard power, in its relations with Southeast Asian states. In 1997, during the Asian financial crisis, China won praise in the region when it refrained from devaluing its currency, which helped to stabilize the region's economy. In 2002, China and other claimants to disputed islands signed an agreement and a Declaration on the Conduct of Parties in the South China Sea, which greatly reduced tensions on this issue. While there is a general agreement that China's tactics have changed to a more accommodating posture with an emphasis on soft power, there is less certainty regarding its implications and whether China's goals have changed accordingly. Bilateral and Sub-Regional Relations An analysis of China's bilateral relations with Southeast Asia leads to a sub-regional division between its relatively more influential position with mainland Southeast Asian states, particularly Burma, Cambodia, and Laos, and its relatively less influential position with maritime Southeast Asian states (Indonesia, the Philippines, and Singapore). Thailand, while more independent than Burma, Laos, and Cambodia, and along with the Philippines a major non-NATO ally of the United States, appears to be relatively more comfortable with close relations with China than other regional states. Muslims in the region (Indonesia, Malaysia) look not so much to China as they do to the rest of the Muslim world for models outside their national settings. Given that Muslims represent approximately half the population of Southeast Asia, and are concentrated in maritime Southeast Asia, this should place limits on the extent of Chinese soft power influence there. Vietnam's unique historical relationship with China, which includes past domination by China and a more recent border war, will also place limits on the extent to which those two nations will likely come together. Singapore, the most strategic thinking and trade dependent state in the region, has promoted a balanced approach to the involvement of great powers in its region. A core difference between China's and America's soft power in Southeast Asia is the organizing principle of their respective approaches. Both countries' foreign policy approaches to the region contain elements of an array of priorities including geopolitical, security, and trade interests. That said, the U.S. approach places an emphasis on democracy and related objectives along with its main theme of promoting U.S. security interests. By contrast, China's "non-interference" policy is less intrusive in the domestic affairs of regional states. While this approach may not garner widespread admiration, it is more palatable to relatively authoritarian regimes in the region, and sometimes earns public appreciation because it appears respectful of national sovereignty. China's changed bilateral relations with Australia are an interesting parallel to recent dynamics in Southeast Asia and demonstrate how the economic aspect of soft power can transform a bilateral relationship with a state that is a close treaty ally of the United States. Australia's strong economic growth in recent years has been to a large extent based on exports of raw materials to China. This has produced a reticence to adopt policies that could anger China. It has even led to some discussion of whether the Australia-New Zealand-United States alliance pertains to potential future conflict over Taiwan. Australia clearly does not want to be forced to choose between its robust and important security alliance with the United States and its rapidly growing and lucrative trade with China. Regional Organizations China has been an increasingly active player in multilateral organizations that include Southeast Asian states such as ASEAN plus three—ASEAN, China, Japan, and South Korea—and the East Asia Summit (EAS), which includes China, Japan, South Korea, India, Australia, and New Zealand, as well as the ASEAN states. The diplomacy surrounding the formation of the EAS in 2005 is particularly noteworthy. The lack of U.S. involvement with the EAS contrasts sharply with the central role that the United States has played in the Asia Pacific Economic Cooperation (APEC) group. The formation of the EAS also demonstrated the differing levels of comfort that ASEAN member states have with China. Some ASEAN states preferred bringing in India, Australia, and New Zealand as a non-American balance to Chinese influence. One factor that appears to be in China's favor is increased regional support for a "more Asia-oriented grouping." This reflects the desire on the part of some regional states for a more Asia-centered focus rather than a trans-Pacific group that would include the United States. Movement in this direction can be traced back to former Prime Minister Mahathir Mohammad of Malaysia who advocated an Asian state-only grouping through the East Asia Economic Caucus. China's foreign aid has had a growing, tangible impact in many countries in Southeast Asia, although it is difficult to quantify, due to a lack of data and to the unique characteristics of Chinese assistance. In comparison to major bilateral donors in the region, China provides relatively little development assistance and lacks a formal system for determining development goals and allocating aid. The PRC administers a wider range of economic assistance that includes non-development aid and low-interest loans, as well as trade and investment agreements. According to some analysts, when these kinds of assistance are added, China becomes one of the largest bilateral aid donors in Southeast Asia. Furthermore, because China offers assistance without the conditions that other donors frequently place on aid (i.e. democratic reform, market opening, and environmental protections), it often garners appreciation disproportionate to the size of its aid, and thus has a large impact on recipient governments. China's policy of "non-interference in domestic affairs" often wins friends not only among Southeast Asian governments but also by many peoples in the region because it is regarded as respectful of their countries' sovereignty. Although PRC assistance reportedly is often not carried out as pledged, such aid, announced at lavish receptions with toasts to the recipient countries, often carries great symbolic value.