While the White House has been focusing its foreign policy attention on Iraq, the rest of the world hasn’t been standing still. China has been using a new approach to expand its influence and appeal. This approach is one at which the United States once excelled but now does badly.

Call it “soft power.”

This term was coined over a decade ago by Harvard professor Joseph Nye to describe a country’s ability to lead by example and get others to follow because they admire what you are. A fascinating new book called “Charm Offensive: How China’s Soft Power is Transforming the World,” looks at Beijing’s increasing skill at using diplomacy, trade incentives, cultural and educational exchanges, and other techniques to build an image of a benign global leader.

The book’s author, Asia specialist Joshua Kurlantzick, describes a Chinese strategy that has received little U.S. attention. Beijing is wooing Asians, Latin Americans and Africans with a subtle approach aimed at countering fears of China’s rising military and economic strength. China wants, says Kurlantzick “to demonstrate to the world that it can be a great power … and perhaps ultimately an equal of the United States.”

Last week Kurlantzick described the practical reasons China is relying more on soft power. In the 1990s many Asians were unnerved by fears of Chinese military adventurism, over Taiwan or disputed islands.

Chinese leaders understood this image was harmful. Given their growth, they needed more access to energy resources, and wanted to play a bigger role in Asia. “China saw that if it reduced (other countries’) fears, it could gain,” the author says.

So the Chinese have expanded people-to-people diplomacy, set up their own Peace Corps, and trained diplomats to speak local languages and appear on local TV shows. Tens of thousands of foreign students attend Chinese universities. Chinese language and cultural studies are soaring in popularity.

China is pouring aid into Third World countries, including many whose relations with the United States have faltered, but which could prove useful for resources, like Venezuela, Sudan and Iran.

China took advantage of the decline of America’s soft power, even before the Iraq war. That decline began during the late 1990s during the Asian financial crisis. Our soft power eroded further when we eviscerated the United States Information Service and its cultural centers in the 1990s. Then came Iraq.

President Bush touts the need for public diplomacy. But his appointment of Karen Hughes as public diplomacy czar has been a failure, as evidenced by poll after depressing poll. One example: In a 2005 BBC poll of 22 nations, 48 percent believed China’s role in the world was mainly positive, but only 38 percent thought the same of the United States.

What’s so disturbing about Charm Offensive is the larger problem it illuminates. America is no longer taking advantage of its greatest strengths: leading the community of democracies by example. Our diplomacy, as Kurlantzick notes, is preoccupied with Iraq. While China promotes a model of authoritarian politics plus growth, we undercut the image of our democratic model by violating our own precepts on domestic surveillance and torture.

When it comes to exercising soft power, America should take a page from China’s book. Train more diplomats to speak local languages, says Kurlantzick. Reopen U.S. cultural centers abroad, and focus U.S. radio broadcasts abroad on real news.

Retake our former leadership in multinational organizations – and take the lead in environmental causes like global warming. Many Asians are poorly informed about China’s unregulated exports and environmental disasters. Were America to take the lead on global warming, Asians might hold China to environmental standards, too.

You get the picture. Soft power matters because countries that like you will want to be your allies; those that don’t are open to the appeal of your up-and-coming rivals such as China.

“If soft power is not exercised it goes away or somewhere else, doesn’t it?” asks Foreign Policy Research Institute President Harvey Sicherman. The answer, as Kurlantzick’s book makes clear, is a definitive “yes.”