The administration of United States President Barack Obama has rebranded the country's foreign policy around the grand concept of "smart power", an expression which envelops great confidence if not self-satisfaction, and which, to a certain extent, presupposes a strategic dominance.

However, if it wants to maintain a real capacity to influence world affairs, the West should not assume a position of intellectual superiority but try to comprehend what makes the success of the new global forces. While the US public diplomacy apparatus works to persuade the world of its benevolent "smart power", China is quietly reshaping the global village with the effectiveness of its "subtle power".

In the first half of the 21st century, the major redistribution of power and the great game for influence are obviously taking place between Washington and Beijing.

At the end of each decade which followed Deng Xiaoping's opening-up, the China watcher had to formulate the same observation: The gain of Beijing's relative power in the international system anticipated at the beginning of the period had always been underestimated.

Fundamentally, the analysts have been unable to assess and anticipate accurately the Chinese momentum because they were preoccupied by what they viewed as China's structural inadequacies and did not comprehend Beijing's "subtle power" or its extraordinary adaptability.

Forty years ago, China ordered the destruction of Confucian symbols, but a massive statue of the Chinese thinker has now become one of Tian'anmen Square's major attractions. Beijing's leaders are not only in charge of the People's Republic of China but they are responsible for the renaissance of a civilization state.

Amid unavoidable ups and downs in domestic affairs, Beijing has certainly been able to create the conditions for rapid development but the evolving geopolitical environment favored China's reemergence. The collapse of the Soviet Union offered the Chinese leadership new strategic options not only in Central Asia and in Northeast Asia but also in Southeast Asia; post-Sept 11 geopolitical tensions allowed Beijing to advance its interests without too much American attention; the financial crisis exposed Wall Street's excesses but underlined Beijing's prudence; and the tumult in the Arab world is not a major cause of concern for Chinese policymakers but constitutes a real challenge for the West and its allies.

While China's re-emergence corrects a development imbalance triggered by Europe's industrial revolution in the 18th century - Kenneth Pomeranz's "great divergence" - the re-entry of one-fifth of mankind to the centerstage of history also marks the beginning of a period where different types of modernity have to coexist.

Beyond more tangible economic or political multipolarity, one should pay great attention to a global contention of ideas without complacency or condescension, and realize that China's role in the global intellectual debate will be proportionate to the depth of its ancient civilization.

The unique combination of size, speed and scope which characterizes China's transformation has no equivalent in world history. At the end of last month, Justin Yifu Lin, the World Bank's vice-president, declared at the China Economic Development Forum in Hong Kong that China's economy will be the world's biggest by 2030; in 1978, China's economic output was less than 2 percent of the world economy.

When US investment bank Goldman Sachs made its first forecasts for the BRIC (Brazil, Russia, India and China) economies in 2003, experts predicted that China would overtake the US by 2041 but they now mention 2027 as being the year of the highly symbolic shift. Standard Chartered announced that the change will happen by 2020.

Thirty-three years after the beginning of Deng Xiaoping's policy of reform and opening-up, Beijing has regained a position of centrality in Asia, and China's hard power is certainly already considerable. In a relatively short period of time, China has become the top trade partner of Japan, Australia, South Korea and Kazakhstan but also of Brazil and South Africa - after only 13 years of diplomatic relations between Beijing and Pretoria.

In the Fortune Global 500 ranking, not one single Chinese firm was ranked in the top 20 in 2005; three companies headquartered in Beijing were ranked in the top 10 in 2010.

Some figures are more explicit than lengthy prose: In the first month of 2011, China's central bank announced that its foreign reserves, already the world's biggest, soared to $2.8 trillion. Beijing owns $1.1 trillion of American debt - in historian Niall Ferguson's words, the globalization of finance has turned "China into America's banker, the Communist creditor to the capitalist debtor in a change of epochal significance".

In the 1980s, China's contribution to total world GDP growth was 3.6 percent; in the 90s, 9.6 percent; and in the first decade of the 21st century, 25.5 percent. With such momentum, the results of a 2010 Pew Research Center survey are not a surprise: 74 percent of the Chinese people are optimistic about the future against 52 percent of Americans and 40 percent of Europeans.

Despite the acceleration of a process which puts China in a position of growing strength, many still point to what they perceive as Beijing's weak soft power. This is, for example, the view of the venerable American political scientist Joseph Nye.

However, such an emphasis might be explained in relation with a perceptive remark made by Italo Calvino in Invisible Cities: "It is not the voice that commands the story: It is the ear."

Or, more precisely, the China story is often rewritten in fiction which can be reassuring for Western ears but which does not always reflect the reality.

One should not approach China as an intrinsically imperfect entity whose reach will be limited by some essential inadequacies but look at it as a developing force on the way to fully realize truly unique potential.

While the West would like to believe that China's progress is synonymous with Westernization, the Chinese renaissance is in fact the renewal and the reaffirmation of the Chinese identity.

In other words, the West would like to re-create China in his image - and, by doing so, helping to solve the so-called China's image problem - but China's representation of itself cannot correspond to such a fantasy.

Interestingly, the Western discourse on China's so-called lack of soft power could be another case of Western-centrism. Indeed, it can be argued that China is not trying to conform to Western models, to adopt foreign standards or to operate according to exogenous references but that is developing a sui generis modus operandi in a permanent effort to maximize effectiveness.

If the notion of "smart power", an approach strongly advocated by US State Secretary Hillary Clinton, is generally defined as the combination of hard and soft powers, "subtle power", China's way of extending influence, can be described as the art of using three minimalist axioms - non-confrontation, non-interference and readiness for paradigm change - compatible with classical Chinese strategic thinking.

As to what the West perceives as a Chinese soft power deficit, China can be puzzled - sometimes amused - by what it frames as the US' lack of "subtle power".

China can, of course, work to increase its "smart power" as much as the US or others can be inspired by the idea of "subtle power" but the US will remain more at ease with the grand principles of "smart power" and China more in its element with the restrained but penetrating force of "subtle power".

Laozi, 2,500 years ago, prepared the Chinese mind to a world of paradoxes: "The sage relying on actionless activity (wu wei) carries on wordless teaching".

He also famously described the most subtle skills necessary to maintain internal political equilibrium, an ideal preparation for the infinite nuances of effective diplomacy: "Ruling an immense country is like cooking a small fish."

And, he wisely noticed that "the highest good is like that of water", and explained that "nothing under heaven is softer or more yielding than water" even if "one cannot alter it". In the 21st century, China's "subtle power", softer than Joseph Nye's soft power, will quietly extend its influence and it is in the highest interest of the West not to underestimate the force of the Chinese momentum.

In a sense, as it might be smart for China to increase its soft power by articulating a universal narrative, the wise thing for the West to do could be to learn from China's "subtle power" by showing less but achieving more.

The author is director of the Euro-China Center for International and Business Relations at CEIBS, Shanghai & Beijing, and founder of the Euro-China Forum.