Zhao did not need to list all the other problems that had cast a cloud over the venture. The payment shortfalls on the energy projects, the glacial progress on the special economic zones, the fact that Gwadar itself had barely moved forward since my trip, or the many unhappy constituencies who felt they hadn’t had their fair share of the pie. Some of these were problems that might have been fixed in better circumstances. But with Pakistan’s economic situation in a mess, and a new government in office that believed CPEC to have been a gambit by its predecessor to consolidate its political power, the appetite for fixing them was low. Zhao was incredulous. He knew that executing CPEC would be difficult. But this wasn’t supposed to happen in the single country in the world where China had a near-sanctified status.

  He soon disappeared into a huddle with the planning minister, Khusro Bakhtiar, a member of parliament from a landed South Punjabi family. I’d last met him to discuss CPEC at the polo club in Lahore. This time, however, Bakhtiar really didn’t want to talk to me. As Zhao had observed, the government did not have its story on CPEC straight, and any time a minister said something amiss, the Chinese diplomat’s boss would call on the army chief who would tell the minister to shut up. As a result, most of them decided it was better to say nothing at all or—as Bakhtiar did that evening—only the most careful of generalities. When I wandered inside a few minutes later to get some dessert, I heard him opening a sentence to one of the other guests with: “The problem with China is…” He stopped dead when he saw my ears prick up and stalked out of the house, wearily exclaiming “I’m supposed to be off duty tonight!”

  The tensions on show that evening were illustrative of a deeper problem. CPEC could at least be semi-fixed, put back on a track that would show that the whole venture was still moving forward. Yet that wasn’t the bar. CPEC was supposed to have a demonstration effect. It would cement a deeper set of ties between the two sides, a success story that would encourage others to join the “friends of China” club. It had special billing. For Xi Jinping’s globe-spanning, trillion-dollar Belt and Road Initiative, it was the flagship. The comparison that Chinese officials endlessly disavowed in public, thereby putting it at the top of people’s minds, was the Marshall Plan. Beijing was going to flood the developing world with the finance that others wouldn’t provide, to pay for the priorities—such as traditional infrastructure-building—that the West was telling these countries they shouldn’t even want. And Chinese companies would occupy the central role in turning these dreams into reality on the ground. The repeated claims that this had no ideological quality to it never fully rang true. In Pakistan’s case, evidently no-one expected the replication of China’s unique system. But CPEC was always imbued with a strong sense that it wasn’t only fellow Communist states that should learn from China’s experience.

  The belief on the part of Chinese officials that their development model had resonance beyond its borders long pre-dated the Belt and Road. From Kim Jong-Il to Fidel Castro, foreign leaders passing through China would routinely be subjected to lectures on why the Chinese reform and opening path was the right one for them to take. But it was one thing giving lectures to poor fellow-Leninists about how to preserve their systems, quite another to be exporting elements of your model to vast swathes of the developing world with hundreds of billions of dollars in financing behind it. When I used to discuss the plans with Zhao at the embassy, he rarely spoke of classic development or economic theory. His reference point was invariably Deng Xiaoping’s “reform and opening” process and the bracing effect of foreign presence in special economic zones on the competitiveness of Chinese business.

  CPEC was the first place where this was attempted at scale. The frustrations about what Chinese officials saw as the Pakistani elites’ failure to take these lectures on board amounted to more than just a disappointment about CPEC itself. It was a question of whether the most ambitious goals of the entire strategy that the BRI embodied could ever really succeed.

  Laamu Atoll, February 2020

  In early 2020, I was paying a visit to a port that only ever existed on paper, if at all. In the Maldives’ southern atoll, where speculation about China’s investment plans abutting a major Indian Ocean sea-route had once raged, there used to be a striking juxtaposition. The island of Gaadhoo, near the One and a Half Degree Channel, where many of the shipping routes back and forth to Asia pass, become the subject of intense conjecture as the habitation there was evacuated and rumors swirled that a Chinese port or surveillance facility was planned. Chinese workers had been there on neighboring Laamu in force, building the Maldives’ longest road, which ran handily from the airport to the most convenient spot for transit to the potential facility. At the same time, India had a military helicopter at the nearby Maldivian air-force base attached to the airport. And facing Gaadhoo was a US-run sea cucumber farm, believed with total conviction by various Maldivian officials to be a CIA facility.

  It was the new Cold War in the Indian Ocean in microcosm, replete with rumors that often substantially outran reality. I headed down in early 2020 to take a look. Two of the elements were still very much alive and kicking. The Indian helicopter was now manned by an even larger group of its military personnel. The US sea cucumber facility was in full flow, its staff a little exasperated at being seen as CIA agents. The Chinese workers, however, who had been sticking around under the previous government to perform “maintenance,” had all gone, leaving only the incongruous road and a little of their construction debris behind. Across the water, the island where the port was once envisaged now stood entirely empty of its residents.

  CPEC and Gaadhoo were far from the only projects that were running into problems. Indeed, 2018 was an annus horribilis for the entire initiative. One of the most reputationally damaging cases was Malaysia, which competed with Pakistan for the sheer financial scale of the projects that were being pursued. The ninety-two-year-old Mahathir Mohamad’s return to power in May had seen China subjected to the same vituperation that he used to reserve for the Western powers. Unlike the Pakistanis, who needed to manage the relationship carefully in public, the veteran leader pulled no punches in stating that tens of billions of dollars in infrastructure plans would be canceled outright.

  The change in government saw the emergence of a series of shocking stories about how China had secured the contracts in the first place. Leaked minutes from the Malaysian government revealed Beijing’s willingness to bail out the scandal-ridden 1MDB fund, the mammoth state-run strategic development company whose assets were siphoned off into Prime Minister Najib Razak’s bank account and the playboy lifestyle of its mastermind, Jho Low.[2] They also promised to press other countries to stop their probe into the corrupt venture, to finance projects at massively plussed-up levels in order to generate additional sources of money to skim off, and to bug the Wall Street Journal reporters investigating the 1MDB corruption case. It was so manifestly egregious that, as one of the Malaysian officials involved in the negotiations told me later that year, when the new government laid out what they knew and demanded huge slashes to the project costs as a result, Chinese officials didn’t even attempt to push back.

  At least Pakistan and Malaysia were weighty enough actors to fend for themselves. The accusation directed increasingly tellingly at China was that its financing practices left smaller countries so beholden to Beijing that a change in government made little difference. In early 2018, I was paying a visit to perhaps the most emblematic example of this, Sri Lanka, for a tour of some of China’s infamous white elephant projects there: Hambantota’s barely functioning port, the fully staffed airport without any flights, and the oversized cricket stadium, all constructed in the former president’s home constituency as ostentatious political spoils with his name affixed to them.

  Although these projects pre-dated the Belt and Road, the ramifications would last well afterwards. The defeat of the China-friendly Rajapaksa government in 2015 had seen its critically minded successor, in economically straitened conditions, agree a ninety-nine-year lease with Chinese companies for the port in return for some breathing room on its wider debt situation. India and the Western powers had encouraged and embraced Rajapaksa’s fall and then pretty much left Sri Lanka to it. The cost to China’s image was acute, with Hambantota cited almost endlessly as a precautionary tale. But the implication of the whole episode was still that, in the end, there was no alternative to Chinese money.

  A few hundred miles further out in the Indian Ocean, a story was unfolding that suggested that events were about to repeat themselves. Colombo, Sri Lanka’s capital, was the base for the Maldivian opposition, where a childhood friend, Paul, worked as an advisor to the former president, Mohamed Nasheed. Through his work with Nasheed, I had followed the Maldivian opposition from their days as a forlorn-looking protest movement in exile, standing with cardboard signs outside luxury hotel conventions in London discouraging unethical investments in the country’s resorts, to their sweep into office in 2008 at the expense of the country’s longstanding dictator. Barely three years later, they were forced out again in a soft coup.

  Paul told the story in blow-by-blow detail to the international press from a bathroom in the president’s office while soldiers marched through the building. It sent the democratic opposition back into exile. Nasheed, recently released from his second stint in a Maldivian prison, lived in a modest apartment in Colombo, and I was dropping by to discuss a subject that had shifted from a peripheral issue when he was last in office to his number one problem now: China.

  Whiteboards in Nasheed’s makeshift office mapped out the flows of Chinese money to the authoritarian president who had taken his place, with bank account numbers and shadowy Chinese entities forming a complex puzzle that his staff were trying to disentangle. Nasheed was aware that this went beyond corruption on the projects themselves. In the Sri Lankan elections three years earlier, China had dropped the pretense of non-interference to provide outright slush money to the Rajapaksa campaign.[3] With the Maldivian government under mounting international pressure to hold elections itself later in 2018, the concern was that it would be carried back into office on a tidal wave of Chinese cash.

  At the time of the coup that forced him out several years earlier, Nasheed’s deposal was treated with a degree of indifference by India and the United States. He was spiky and independent and not very deferential to bigger powers that expected the little Maldives to get in line. Ironically, one of the issues that New Delhi held against him was the supposedly excessive level of openness to China that Nasheed had exhibited as president, allowing Beijing to open an embassy and accepting small sums of Chinese financing for a housing project.

  Nasheed was a fierce democrat and had little enthusiasm for dealing with the Chinese Communist Party. He would take obvious pleasure in standing up to Wen Jiabao at the 2009 Copenhagen climate summit. It was the Maldivian delegation that fed out the critical information to the international media about how China had tanked the talks. But Nasheed had promised to build housing in his election campaign and struggled to find the modest sums of money required from other sources. This nonetheless counted as a black mark against him in India. If another pliable autocrat from the family of the old regime held the reins of power in the Maldives again, did it really matter?

  It turned out that it mattered quite a lot. As time went on, Yameen, his successor as president, led the country into a vastly greater economic embrace of China. Indian companies were thrown off the construction of the airport, huge sums were sunk into bridges, roads and islands in sensitive locations. A free-trade agreement with China was rammed through parliament without the opposition even having the opportunity to look at the text.

  By early 2018, Beijing was the only friend that Yameen had left. His increasingly authoritarian behavior had seen the Maldives effectively frozen out of the Commonwealth, and the United States, India and the major European states started to exert a growing squeeze on him ahead of the elections that were nominally due to take place later that year. In February, everything was coming to a head. There was a febrile level of conjecture that China was moving naval vessels in to protect him. Nasheed called outright for an Indian military intervention to restore democracy in the country. At a conference we both attended in Bangalore, Nasheed would be prominently photographed meeting with the Indian defense minister, a pointed warning to China that his intervention request was not being dismissed out of hand. “There is a new Cold War in South Asia, and we have to choose sides,” Nasheed stated baldly in his remarks there. He accused China of pushing the country into extremes of debt, in lockstep with the corrupt President Yameen, who was now single-handedly being propped up by Chinese money as virtually every other country deserted him.

  In fact, India had calculated that—whether or not it was advisable—no military intervention would even be required. As Washington, New Delhi and European capitals exerted their squeeze, Yameen—under threat of further sanction—ended up holding the scheduled elections later that year and miscalculating his prospects in a campaign where he had banned most opposition leaders from running. A final gambit, which involved using electronic tablets from China to tabulate the election results, failed when they all mysteriously crashed on Election Day and the tallies had to be undertaken with pen and paper instead. Nasheed’s ally, Ibrahim Solih, won the presidency comfortably. When I next met Nasheed himself again in the densely populated Maldivian capital, he was Speaker of the House.

  I watched him at the Democratic Party’s headquarters preparing candidates for the parliamentary elections they would storm the following month. Ministers were poring over the details of the Chinese contracts, digging out any indication of corrupt practices. The free-trade agreement with China sat unsigned in a corner of the president’s office and was the subject of running jokes from his advisors. Money flowed in from India and its partners to shore up the debt-ridden economy, and while the new president trod more carefully in his language on China, Nasheed continued his denunciations and engaged in regular public spats with the Chinese ambassador. “We’re happy to pay them back fairly,” he told me during a quick chat as another batch of candidates trooped in for his pep talk: “But only the real price, not all the inflated mark-ups too.” Needless to say, there was no more talk of Chinese listening facilities in the southern atoll.

  The Maldives was one of a number of countries that were supposed to become part of the circle of Chinese friends. The sums of money at stake for a country with a GDP of $5.6 billion and a population of 500,000 were not large, and there were ways in which a well-crafted economic package there could have landed well with the opposition too. There was no intrinsic reason for the fevered political back and forth that would come with each election. But it was also very clear that there was no chance for the country to become a reliable military partner unless Beijing could consolidate an authoritarian regime in place there over the long term.

  Pakistan meanwhile was the closest thing politically for Beijing to an open goal, a country where criticism of China, the so-called “all-weather friend,” had once not just been muted but seen as virtually unconscionable. Building a national consensus behind CPEC was hardly an insurmountable reach. Failure here was even more painful.

  The story of Chinese investments in Pakistan, the Maldives, Malaysia and many other locations certainly did not come to an end in 2018. Slimmed down versions of some of the ventures have still been moving ahead. As Nasheed’s remarks illustrate, even China’s fiercest critics did not wish to abjure an economic relationship with Beijing altogether. But politically, the whole venture had become a reputational headache, in many countries achieving precisely the opposite of its intended strategic effect. China itself was under no illusions about what it meant. The Belt and Road Forum in Beijing the following year saw an uncharacteristically chastened-looking Xi Jinping explaining how in future everything would look different. There was talk of a BRI 2.0—a more consultative approach, more judicious about political and economic risk, better attuned to standards, more focused on quality and less focused on speed and scale. This, however, was the path that Xi had already rejected. Indeed, one of the most effective critiques of the BRI came from within the Chinese system itself, before the venture was even fully launched. The road not taken was that of Jin Liqun.

  * * *

  —

  At first glance, Jin’s profile looks unusual—a former Red Guard who would go on to chair a Chinese investment bank, translate a classic history of J. P. Morgan and modern finance, and move fluidly between senior roles at the Chinese Ministry of Finance, its sovereign wealth fund, the World Bank and the Asia Development Bank (ADB). But for all that he was personally exceptional, the world of Chinese economics and finance had a number of other similarly brilliant characters. Many embodied the insider–outsider quality that would see them steeped in classical economic theory, trained in the West, deeply familiar with the workings of the existing international institutions, yet viewing it all from a perspective rooted in their own lives and experiences in China.

  For decades, the most important role that people like Jin had played was at home—the economists doing the heavy lifting work in China’s domestic reform efforts, acting as bridges between the Chinese system and the multilateral development banks that played a critical role in China’s economic transformation. They saw the deficiencies of Chinese institutions and practices and wanted to apply and tailor the best of international thinking and experiences to fixing them. But in the aftermath of the 2008 global financial crisis, something changed.

  The nature of the moment is still best captured by Wang Qishan, then the Chinese vice-premier, and himself one of the most internationalized, financially literate figures at the top of the Chinese system. His remarks to US Treasury Secretary Hank Paulson as the crisis unfolded—“You were my teacher but look at your system, Hank, we aren’t sure we should be learning from you any more”—became emblematic of the mindset shift among Chinese elites.[4] China’s relative resilience through the crisis, and the catastrophic failure of the various US “masters of the universe” to manage and regulate the financial and economic architecture they had built, had a number of profound effects on attitudes in Beijing.