Joseph Nye’s concept lost relevance, but China could bring it back.
Several things went wrong. For one, the products didn’t really suit the customers. From the “third wave” democracies of the 1970s and 1980s to the Eastern European states that rushed to join the EU and NATO after the Cold War to, most recently, the countries that weathered the Arab Spring, liberal democracy has had a hard time sticking. In many cases, moreover, it brought about rather catastrophic outcomes for the people involved.
One theory for why is that the neoliberal economic revolution, which was part and parcel of the soft power era, weakened states instead of strengthening them. The market was never a uniting force—the idea that it could be an all-encompassing mechanism to provide growth, good governance, and societal well-being was an illusion to begin with.