By William Pesek
Bloomberg News Columnist

Nobel Peace Prize folks have done something even past winner Barack Obama hasn't: taken on China.

Good for them for shining a spotlight on human rights in the most populous nation. Jailed dissident Liu Xiaobo, 54, is a worthy choice for his struggle to promote democracy. What the Norwegian Nobel Committee did was courageous, too. The propaganda machine that sustains leaders in Beijing was out in force trying to scuttle this award.

Never mind that the group is independent of Norway's government. The tiny country may soon feel the wrath of the Chinese leadership. With its $2.5 trillion of currency reserves, China could buy Norway's economy 6 1/2 times over. Yes, ties between Oslo and Beijing will be a fascinating thing.

More important is what Liu's award doesn't mean: that a whole lot is about to change for China's 1.3 billion people or the world's No. 2 economy.

The Nobel Committee is kidding itself if it thinks the award will do anything to alter China's path. Did anything change in Myanmar after Aung San Suu Kyi's 1991 award? What changed in the Soviet Union after Andrei Sakharov's 1975 nod? And before that, did Alexander Solzhenitsyn's 1970 Nobel Prize for Literature make the Kremlin think twice about policies?

U.S. President Obama's 2009 award hasn't improved his standing domestically or globally. Have the dynamics of nuclear proliferation changed much since Mohamed ElBaradei's 2005 award? North Korean leader Kim Jong Il is still adding to his arsenal ten years after South Korean President Kim Dae Jung's prize.

China's Path

It's great that the Nobel Committee honors a Chinese writer who on December 25, 2009, was sentenced to 11 years in prison. Merry Christmas, Mr. Liu. Just don't count on China following any path other than the one it would have if somebody else had won.

This is the diplomatic equivalent of China surpassing Japan's economy. Quite a milestone, yes, but it doesn't raise the purchasing power of Chinese households, reduce corruption, narrow the gap between rich and poor, clean the nation's rivers and air, enhance personal liberty, free the media or create the national safety net needed to prepare for an aging population.

China's growing economic brawn doesn't mean Mark Zuckerberg's Facebook Inc. is free to operate there. Or that the search engine created by Google Inc. co-founders Sergey Brin and Larry Page can help the Chinese masses learn about their nation's history and future challenges. Nor will YouTube have a free ride in the fastest-growing major economy.

Insecure Superpower

We often mistake China's control over information as strength, when it's really a weakness. China is one of the world's greatest and oldest civilizations, and you would be hard-pressed to find many serious observers who think the nation isn't a rising superpower. Meanwhile its leaders squander time and energy fretting about what academics say.

Insecurity is a natural part of any nation's rise. Yet officials in Beijing are often overly sensitive and let it get the better of them. Instead of taking criticism to heart, as the outside world hopes, they can become hostile and veer toward oppression. That was clear last month when China completely lost it over the Japanese government arresting a fishing boat captain in disputed water. We are seeing it again with Liu's prize.

Put this firmly in the thou-doth-protest-too-much department. Below the surface, it often seems that China cares little about what the world thinks. That's because at some level it can afford to. It was telling, for example, that traders buzzed about Greece seeking a Chinese bailout earlier this year. Recently, China said it wouldn't dump its euro assets as an olive branch to jittery European leaders.

Poking, Prodding

In Washington, politicians can rant and rave all they want about China's undervalued currency. Treasury Secretary Timothy Geithner can poke and prod all he wants behind closed doors. China will revalue the yuan when it wants to. In Tokyo, Finance Minister Yoshihiko Noda can sell all the yen he wants. China can just reverse the effects by buying Japanese government bonds.

China has the means to spread its considerable largess in the name of cultivating resource-rich friends around the globe. Let Amnesty International hyperventilate over how those transactions allegedly support rogue regimes from Myanmar to Sudan. Let the U.S. fret over North Korea's nukes; China has the funds and the inclination to keep the Kim dynasty in business.

The world doesn't need China the banker or China the shareholder. It needs China the stakeholder. China is a global leader and must accept the responsibility that comes with that status. The world needs China to be a constructive and nuanced steward of an international system that has lost its way.

China can stew about the Nobel Committee's perceived slight. Or it can act to the benefit of its massive population and the global economy. On this score, the folks in Oslo should get used to disappointment.