To expand its soft power, China has established over 300 Confucius Institutes globally. To demonstrate its peaceful and friendly intentions, China has resorted to smile diplomacy, panda diplomacy, good neighbor diplomacy and other public relations offensives. China has also taken more global responsibilities such as hosting the Six-Party Talks and sending naval warships to fight piracy off the Somali coast. In a matter of a decade, China's role in international affairs has been changed from being a bystander to an active rule-maker. This article explores the the rationale behind China's new diplomacy as well as the the international community reaction to China's new diplomacy and its implications for international political economy?