China joined other members of the G-20 in Toronto this week, surely a sign that Beijing has taken its seat among the new rule makers of the international system. But what kind of rules does Beijing seek to make and what kind of international posture is China striking around the world?

Following the majestic Olympic Games of 2008, many hoped that China's symbolic success would breed a new confidence and cooperativeness on the world stage. But this did not emerge fully as, during 2009, many observers discerned a number of troubling indications that suggested a more assertive and less cooperative China. During spring 2010, however, there was a thaw in China's icy posture towards the West. Most recently, at the G-20 summit in Toronto, Beijing played up its "South-South" solidarity with developing countries.

Where is China's diplomacy headed? The reason behind the fluctuation in its diplomacy lies in the fact that China itself is deeply conflicted about its international identity and the roles it should play in the world. As one leading Chinese scholar told the recent Stockholm China Forum, "China is still wrestling with what kind of world order it wants."

In the absence of such a global vision and grand strategy, Beijing pursues a more narrowly self-interested foreign policy with a few priorities. The first has China scouring the globe and striking deals with governments and private companies for energy supplies and raw materials to fuel its continuing economic expansion.

The second element has been a continuing emphasis on maintaining a peaceful neighborhood around China's periphery in Asia so as not to jeopardize economic growth at any costs. This preoccupation has led Beijing to expend efforts to patch up relations with New Delhi in recent months, while trying to ameliorate ties with Japan and, to a lesser extent, South Korea.

Nowhere is the "stability at all costs" strategy more apparent than vis-à-vis North Korea, particularly as exposed by Beijing's weak reaction to the North Korean sinking of the South Korean naval vessel Cheonan. Beijing seems ready to tolerate any and every provocation from Pyongyang.

One part of Asia revealing difficulties in China's relations is Southeast Asia. Asean diplomats recently complained of a more assertive Chinese stand concerning conflicting claims in the South China Sea, which Beijing now defines as one of its three "core interests," along with Taiwan and Tibet, and has warned off other claimants – Indonesia, Malaysia, Philippines, Vietnam – from any kind of multinational settlement. Asean diplomats also complain about a new assertiveness in China's attitude towards regional multilateral institution building – arguing that until recently China had been content to allow Asean to "drive the car" of regional policy while remaining a passive passenger in the back seat.

But recently, Southeast Asian diplomats note, "Beijing has climbed into the front seat, is holding the map, and trying to instruct Asean where to go." It is only a matter of time, they observe, before Beijing seeks to take over the steering wheel.

With respect to the United States and European Union, China has tried to ameliorate strained ties with each and maintain a modicum of correctness in official relations, but underneath various sources of friction exist in each relationship. The problems in each relationship are not only bilateral, but also concern the increasing disappointment that both the US and Europe feel concerning their joint desire for China to become a partner on global issues and contribute considerably more to global governance.

On global issues, Beijing appears to act with an odd combination of hesitancy and truculence. As Vice Foreign Minister Fu Ying once said during her time as ambassador in London, "China is at the center of the world stage, but with its back to the audience." Instead of stepping up and taking on a range of global responsibilities, China remains internally oriented, self preoccupied, pursuing a largely narrow self-interested foreign policy.

Internationally, China wrestles with a conflicted identity. On the one hand, it aspires to become and possesses many of the attributes of a great power. But Beijing lacks the confidence to act as a great power – particularly in concert with other major powers. China remains hesitant on the international stage, taking baby steps towards being a confident global leader. In short, China remains a global actor without being a global power.

Part of China's international uncertainty no doubt derives from the leadership's domestic uncertainties – as the country is beset with multiple pressing challenges and a cautious, insecure leadership atop a transitional political system.

Another reason for Beijing's tentativeness likely derives from China's not sharing the liberal values and norms that underpin most international institutions and system, although China has benefited enormously from them. It is difficult to be a "responsible stakeholder" – to use Robert Zoellick's famous phrase – in an international system with which one does not share and practice the operating values at home and was not "present at the creation" to shape the system in the first place. In some key areas – like non-proliferation and free trade – Beijing has embraced global norms, but on so many others its hesitancy is obvious.

Failure to fully embrace liberal norms and institutions does not mean, however, that China cannot be a cooperative partner with others on a purely pragmatic case-by-case basis. But it does suggest that China will continue to act with hesitancy on the world stage, and will be a difficult partner for the West on issues like Iran and North Korea.

Thus we are likely to see China act as a "selective multinationalist" in world affairs, with Beijing working together with a small group of other nations, as distinct from working within real multilateral institutions. Beijing prefers such smaller groups to bigger multilateral institutions, as the latter can constrain its freedom of action. Yet, a partially engaged China is far better than a disengaged or disruptive China.

China's foreign policy establishment believes that China should expand its global involvements gradually, but only on issues where China's national interests, particularly security, are directly involved. The selective multinationalists generally eschew broadly increasing China's global involvements, and they seem to believe that "global governance" is yet one more Western "trap" to tie China down in dangerous foreign entanglements that can only restrain China's rise. Yet they realize that China must be seen to be contributing to global governance, and cannot be perceived as free-riders on the international system.

So, the selective multinationalists are wary of foreign entanglements, but recognize that China must "do some things," or yousuo zuowei,as Deng Xiaoping instructed, in the international arena. But such efforts should be seen as largely tactical efforts at image building, rather than endorsements of the global liberal order.

Multinationalists thus advocate increasing China's participation in UN peacekeeping operations, contributing to disaster relief, fighting international piracy in the Gulf of Aden, and being diplomatically involved in the North Korean and Iranian nuclear issues.

Over time, it is hoped that China will gain more confidence and contribute more to international institutions and global governance. But for some time to come, Beijing is likely to put its own domestic priorities over international ones and continue to practice a self-interested "China first" foreign policy.

The author is director of the China Policy Program at George Washington University and currently a senior Fulbright research scholar at the China Academy of Social Sciences Institute of World Economics & Politics in Beijing. This was reprinted with the permission of YaleGlobal, the publication of the Yale Center for the Study of Globalization.