China in its Neighbourhood: A 'Middle Kingdom' not Necessarily at the Centre of Power

China's regional policy is mainly centred on its efforts to forge a friendly, stable and prosperous neighbourhood. To achieve this end, China has developed an approach combining both partnership bilateralism and tailored regional multilateralism. By and large, China does not consider its neighbourhood as a whole and has been very cautious and hesitant to engage in overarching 'region-building'. China has relied mostly on soft (attractive) use of power, particularly economic power, supported by cultural and assurance diplomacy, even though diplomatic and economic coercion have been exercised occasionally. China has once again become the biggest economy in Asia. Yet, neither the new power configuration in Asia nor China's own ambitions point to a return to the old 'Middle Kingdom' with China holding a dominant position in its neighbourhood. China will most probably continue to see itself as a self-restrained regional power in the foreseeable future.