It was America’s day of giving thanks, and China was having a moment.
A giant float with fang-baring toy monsters was trundling through Manhattan for the Macy’s Thanksgiving Day Parade, as crowds of onlookers whipped out their phones to capture the looming 16-foot balloons—Chinese soft-power icons starring in one of America’s biggest cultural events.
The spectacle marked new heights in the global craze around Labubu dolls, created by a Hong Kong artist and sold by Beijing-based toy maker Pop Mart. For the past year, the mania had been growing: Lady Gaga accessorized a Labubu on her Hermès purse; Cher, David Beckham and Marc Jacobs also clipped the accessory to their bags. The dolls became so hard to come by that some were resold for as much as 20 times their retail prices, while zealous fans traveled to China to hunt down fast-selling goods. Now Pop Mart is opening a 7,000 square foot flagship store in Manhattan’s Times Square, with even more stories planned in malls across America.
The hype around Chinese cultural goods is giving Beijing’s global profile some timely gloss, just as American soft power is losing some of its sheen. China has long coveted the immense influence the U.S. enjoys through its cultural appeal, and President Trump, with his trade wars, chaotic diplomacy and military actions, has created openings for Beijing to polish its pitch of being a benign and responsible power.
Enter fluffy dolls and online influencers into this geopolitical arena. For decades, China has tried making friends abroad through staid state-led initiatives, from sharing pandas to building language institutes. Today, the Communist Party has decided it should sometimes let the cultural free market do the job. (Exhibit A: TikTok.) Now, commercial successes from trendy trinkets like Labubus to blockbuster films and videogames are helping to define China’s standing on the world stage.
The hit 2025 movie “Ne Zha 2,” which features an imp battling demons and deities, became the first animated film and non-Hollywood production to gross more than $2 billion globally, showcasing China’s ambitions to compete with the likes of Disney. A martial arts role-playing game “Black Myth: Wukong,” inspired by the classical Chinese novel “Journey to the West,” notched record-breaking sales after its release in 2024 and lapped up rave reviews from Western gamers.
When Chinese products find that kind of resonance abroad, officials and state media rush in to talk up these smash-hit products as signs of China’s growing cultural appeal, and give them a further leg up in the marketplace.
As Pop Mart reported skyrocketing Labubu sales over the past two years, state media lauded the plushies as proof that China can drive global consumer trends, while regulators cracked down on Labubu counterfeits to protect what had become a major cultural export. Beijing paired its praise for “Black Myth: Wukong” with a dialing back of regulatory pressure on the videogame industry. Local authorities also have welcomed foreign influencers to help present China’s mix of ancient culture and ultramodern infrastructure to global audiences.
China eases its grip
This new playbook marks a rare instance when the Communist Party is reining in its instincts to micromanage society, particularly under Chinese leader Xi Jinping, who has sought to restore the party as the dominant force in people’s lives—such as by tightening state control over private businesses and public speech. The party’s longer leash for some creative industries is helping to boost cultural output that had been stifled by regulatory scrutiny in recent years.
“The party has understood that it cannot design soft power in a meeting room,” said Shaoyu Yuan, an adjunct professor at New York University’s Center for Global Affairs. “The current strategy looks more like this: Let creativity grow inside the system, as long as it does not cross clear political red lines, and then support the winners.”
Xi himself offered a rare endorsement. “Wukong and Ne Zha are global hits,” he said in his New Year’s address. “Classic Chinese culture has become the finest form of aesthetic expression in the eyes of young people.”
For Beijing, boosting cultural exports can help push back against Western depictions of China as a military threat, cybersecurity menace and cheap-goods exporter that Trump claims has been ripping off America. Soft-power tools complement other efforts to boost China’s sway, from infrastructure investments in developing countries to more insidious forms of outreach—such as political-influence campaigns in the U.S. and elsewhere.
The party’s embrace of grassroots-led cultural creations also adds to traditional soft-power campaigns that tap China’s ancient past and natural riches. “Many foreigners’ perceptions of China may still be stuck at kung fu, the Great Wall and pandas. Now, through trendy collectibles, they are seeing a China full of creativity and attuned to young people’s needs,” a party-run newspaper said. “Through these trend icons, China is reshaping the world’s perceptions of who we are.”
Success could yield more receptive audiences for China’s efforts to expand its economic reach, assert its interests and challenge the U.S. for global leadership. Recent surveys show warming sentiment toward China, particularly in the developing world and among youth—narrowing Beijing’s soft-power gap with Washington as Trump’s “America First” agenda rankles allies and partners.
“Beijing benefits when the U.S. damages its own standing or retreats from global leadership, but China’s own efforts to project state-sponsored soft power have produced mixed results,” said Lizzi Lee, a fellow at the Asia Society Policy Institute. Cultural creation in the private sector, she said, “is where China has been far more effective.”
The party also reaps domestic gains from its push for cultural appeal. Beijing is “telling domestic audiences: ‘Our culture is strong, our creators can compete with Disney and Marvel, and the party is the guardian of this rise,’” said Yuan, the NYU scholar. “The external influence matters, but the internal message about legitimacy is always central.”
Behind the effort to evolve China’s approach
The party’s lighter-touch on culture comes amid the rise of a trusted adviser in Xi’s inner circle, Li Shulei. A former literature professor at the Communist Party’s top training academy, where he was once a deputy to Xi, Li has long urged China to foster pride in its heritage and brace for a culture war with America.
Since becoming the party’s propaganda minister in 2022, Li has championed Xi’s program to invoke Chinese arts, traditions and history to justify Communist rule and boost Beijing’s soft power. “The more we face containment and suppression, the more we must promote open cooperation in the cultural field, and showcase a credible, lovely and respectable image of China,“ Li told a forum in May.
A state-run news portal credited a Li essay with shaping Xi’s views on improving the party’s public messaging through livelier language. As a literary critic, Li argued that China must cultivate confidence in its culture to prevent society from falling into disorder. He singled out the U.S. as a leading threat, writing essays that criticized what he described as American arrogance and the corrosive influence of American consumerism—views that prompted peers to call him a “culture warrior.”
“Since powerful foreign countries are so open about using culture as a weapon against other nations, we have no choice but to respond in kind and strive to enhance our country’s ‘soft power,’” Li told a Chinese newspaper in 2007.
Some analysts credit Li with steering the party toward giving public praise, providing creators with intellectual-property protection or financial incentives, and injecting these products into official narratives about China’s global stature.
Embracing foreign influencers is part of the strategy. When IShowSpeed, a popular American streamer named Darren Watkins Jr., toured China last spring, the country’s officials fanned online buzz about his trip, praising “Hyperthyroid Bro”—as he is known in Chinese—for presenting an authentic view of the country. A segment on state television featured what it called a “fantastical China tour,” and recounted how IShowSpeed tasted Chinese delicacies, visited landmarks including the Great Wall and the ancient Buddhist Shaolin Temple, and visited a traditional Chinese medicine store, where he tried acupuncture.
Watkins’ livestreams encouraged “Chinese people to re-examine their lives” and cherish their country’s achievements, Zhejiang province’s propaganda department said on social media. “Many Chinese netizens realized: ‘The life we take for granted is actually a luxury in the eyes of others.’”
The same enthusiasm applied to the videogame “Black Myth: Wukong,” which came as China eased regulatory pressure on its videogame industry. This was a reversal of Beijing’s tightened oversight in recent years, with authorities at one point halting approvals of videogame licenses after Xi voiced concern in 2021 about gaming addiction among Chinese youth.
As the game flourished, Beijing shifted its tone, calling it an artful representation of Chinese culture, which helped revive investor interest and drive up share prices for videogame companies in China. Chinese regulators have also issued more videogame licenses, approving 1,771 titles last year—a 25% increase from 2024.
Outside China, some players said “Black Myth: Wukong” inspired them to read “Journey to the West” or watch dramatizations of the novel, so that they could better grasp story lines and cultural references in the game. “I felt as though I were a little more connected to a culture, a country, and its history,” said Shaz Mohsin, a Toronto-based videogame reviewer.
To Lee at the Asia Society, that kind of response is exactly the point. These cultural products “succeed because they feel spontaneous, playful, sometimes a bit subversive,” Lee said. “The party wants to harness the soft-power upside without giving up control over the narrative.”
Write to Chun Han Wong at chunhan.wong@wsj.com