Prosperity and a red carpet trump democracy

African leaders left Beijing smiling like crocodiles, as workmen started to pull down the posters of giraffes, elephants and flamingoes that had replaced advertising hoardings all over the Chinese capital. Never before have they been fêted as they were at the China-Africa summit last week. While the west talks of helping Africa and of saving it from itself, at the Forum on China-Africa Co-operation, China spoke of a "strategic partnership" and a joint approach on "global security threats", including Africa in rebalancing the post-colonial, post-cold war, post-Iraq world.

Even leaders such as President Festus Mogae of Botswana, praised by the west as a democrat, were seduced by eastern charm.

"China treats us as equals, while the west treats us as former subjects. That is the reality. I prefer the attitude of China to that of the west" - he paused here to chuckle loudly - "although there's bugger all I can do about it!"

Old resentments die hard. Mogae recalled Bots wana's first leader, Sir Seretse Khama, being greeted at Heathrow by "some old man from the Colonial Office", while even back in the 1960s and 1970s, the Chinese would roll out the red carpet for any high-level visitor, however small a country they represented. "They treated Sir Seretse just as they treated Richard Nixon!" he declared, possibly with a little exaggeration.

Much of the rhetoric at the summit was also reminiscent of the 1970s - anti-imperialism, south-south co-operation, the noble struggle of developing countries for their rights. But, while back then it was so much hollow talk in the face of America's overwhelming economic and military power and cold war exigencies, today China has renewed financial and diplomatic sway.

China's foreign currency reserves topped a trillion dollars this week. With so much liquidity, no wonder it feels comfortable lending four times as much to Africa as the World Bank does: $3bn in preferential loans, $2bn in export credits, a new $5bn fund for Chinese investment in Africa - all these new pledges are not just about ingratiating China with Africa to get mining rights and oil concessions, but also to build up Beijing's diplomatic muscle. China is supporting a permanent African seat on the UN Security Council, convinced that, in most situations, an African representative would support the Chinese not the American position.

All this comes as the US finds itself in a position of unprecedented global weakness. The desperate failure of Iraq and the unresolved war in Afghanistan have sapped America's appetite for international adventures. Recalling how the US used a 12-year-old Security Council resolution to justify war in Iraq, the Chinese are working with the Russians to ensure that a new resolution on Iran states that military intervention is not an option.

"We learnt our lesson from what happened in Iraq, and that's why we want to be very clear," said a Chinese diplomat at the UN last week, quoted in the Washington Post.

China and Russia already insisted that the UN Security Council resolution on North Korea cited Article 41 of Chapter 7 of the UN Charter, explicitly ruling out military force. The Chinese have played the role of honest broker between the US and North Korea, even persuading the Americans to talk directly to the North Koreans last week. Now the US has agreed to discuss banking sanctions in new six-party talks on the North Korean nuclear programme, while before they said their decision to freeze Pyongyang's accounts in a Macau bank was non-negotiable.

China cannot rival US military strength of course, and the Chinese economy is subject to downturns like any other. Political unrest or environmental pressure could seriously slow or even reverse its high growth rates. But the Africa summit was an example of how China is using its "soft power" - the ability to gain support by cultural and political influence - while western powers are finding it ever harder to push their ideology that democracy is the only valid system of government.

Denouncing China for welcoming abusive autocrats such as Zimbabwe's Robert Mugabe, or the ruling clique in Sudan, makes no difference. The Chinese have the money and the commitment, and nothing can stop them. Enlightened diplomats at Britain's Department for International Development are now trying to engage China on development in Africa, but the challenge is much wider.

Around the world, people can see that China's prescription for prosperity, which sacrifices individual rights and democracy for rapid growth, is working, because millions of Chinese people have better lives than before. It may not work forever, but the Chinese experience disproves the mantra that capitalism can flourish only in a democracy.

Those of us who value freedom of speech, and watch aghast as the Chinese block internet sites and lock up lawyers defending peasants and people with Aids, have to acknowledge that we are the ones on the back foot, needing new arguments and a new approach.

Lindsey Hilsum is the China correspondent for Channel 4 News