In the decade since, more than a trillion dollars of investment have poured into BRI projects, a figure that rivals what Western countries together put into their aid budgets. That China found eager suitors around the world for its new largesse is no surprise, not least because Western countries had started pulling in their horns — with Britain, for instance, recently cutting an aid budget that had been a pillar of its soft power in order to build an aircraft carrier.

But in filling that vacuum, China has unsettled Western nations and few of them will attend when representatives from more than 100 countries gather in Beijing for the third Belt and Road Forum for International Cooperation. Increasingly, especially in the American foreign policy community, we hear talk that China is using the BRI to build a rival bloc to the West.

In an apparent response to the BRI, at the recent G20 Summit, the US and some of its partners announced an infrastructure programme to connect Asia and Europe. But if they’re hoping to go head-to-head with China, they may want to reconsider their tactics because one thing China is really good at is building infrastructure. In the time we’ve spent trying to make up our minds about whether to dig a short tunnel to Euston station, China has installed nearly 40,000 kilometres of high-speed railway.

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In any event, finding nefarious intent in the BRI may say more about the observers than the observed. A recurrent temptation we in the West face is to look at China’s behaviour through Cold War lenses, substituting the Middle Kingdom in the role vacated by the fallen Soviet Union. Seen this way, the BRI appears to be China’s attempt to transform its economic power into political control by drawing a string of countries more closely into its orbit. Some even detect an ideological blueprint in China’s willingness to forge partnerships with autocratic regimes, citing it as evidence that it wants to build an anti-democratic, anti-Western bloc.

In reality, though, there wasn’t much geopolitical thinking behind the original conception of the BRI. Instead, it was concocted by bureaucrats who were trying to solve an economic challenge: China’s economy had run into a wall. To overcome the 2008 global financial crisis, it had embarked on a massive fiscal stimulus and succeeded in lifting the world economy out of recession, but also left itself with a lot of excess capacity. Meanwhile, China was nearing the limits of a growth model that had relied on low-wage workers to assemble goods for export. As the huge surplus labour force was mopped up, wages rose, auguring a future in which Chinese firms would no longer be able to undercut their competitors abroad.

If it were to escape this classic middle-income trap, China would need to orient its output towards more technologically advanced production, and move its labour-intensive assembly offshore. Having built its economy by luring the waves of outsourcing that had helped deindustrialise America, it now needed to do the same and move some of its own manufacturing to lower-wage zones beyond its borders.

A group of civil servants came up with a plan to achieve this: by creating transportation networks that would give it access to overseas markets, supplies, and labour, and then exploiting those links to develop its partnerships, China would be able to expand its economy beyond its national borders. It would not use a classic aid programme like the Marshall Plan to do this, though. Instead, Beijing would encourage its banks to stump up the capital on commercial terms, something they were quite able and willing to do given the vast pools of capital accumulated in a country that saves nearly half its output, and where the list of high-yielding opportunities at home has been diminishing.

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The policy proposal landed at a propitious time. With Xi Jinping having just gained power, Beijing was growing increasingly concerned that its good relations with Western trading partners would come under increasing strain. Barack Obama’s ascent to the US presidency and his administration’s pivot to Asia, which boosted America’s military presence as a counterweight to China, solidified this perception. China’s subsequent exclusion from negotiations around the proposed Trans-Pacific Partnership only reinforced that belief in Beijing. Xi made the BRI his own, and it soon became a linchpin of his new economic policy.

While the BRI was crafted as an economic programme, it soon became apparent to the Communist leadership that it could drive a new geopolitical strategy too. For one thing, the BRI gave China the chance to showcase a whole new model of development. Whereas the Western approach to global development focused on using multilateral financial institutions, such as the IMF, World Bank, and World Trade Organization, to engineer pro-market policy regimes, then assist their implementation with targeted aid, China believed that building infrastructure was the key to development. Meanwhile, China regarded the regime of development or governance or human rights a country might choose to use as entirely its own business, a position which reflected its tradition of non-interference. Given the widespread perception in the developing world of Western countries as arrogant imperialists imposing their own moral or economic agendas, China’s standoffishness proved a refreshing change.

All the same, the BRI hasn’t created an alternative global financial architecture — at least not yet. Unlike the multilateral order created at Bretton Woods in 1944, it has more limited ambitions. The IMF, World Bank and WTO operate all over the planet; China’s BRI is focused primarily on Asia, Europe, Africa and Oceania — in effect, in those parts of the world that could at a stretch be called its hinterland. And when it comes to diplomatic engagement, China still prefers to avoid multilateral regimes to focus on the more modest but practical approach of bilateral relations.

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This approach, though, is causing China some growing pains as it engages with the world in a way it’s never seriously done before. On the one hand, the BRI is serving the country’s goal of expanding its export potential. But in many countries, especially in Africa where China has a large and growing presence, the administrative capacity to manage complex infrastructure programmes is lacking. As a result, the initial euphoria over Chinese largesse has in recent years given way to a more sober assessment, as payments have come due and some governments have struggled to meet them.

This has led some Western commentators to latch onto the concept of “debt-trap diplomacy”, the idea that China has loaned money with the aim of later swooping in and seizing assets when the debtor defaults on payments. Often cited as an example of this is the case of Sri Lanka, which allowed China to take direct control of one of its ports on a 99-year lease when its government found it couldn’t pay its debts.

But the reality is probably more prosaic. China is learning the hard way what Western governments have dealt with for decades — the problems of insolvency in sovereign debtors. In response, it appears to be re-orienting towards a somewhat more Western style of “small but beautiful” lending that prioritises smaller, targeted projects. Over the years, Western governments have developed an elaborate global architecture through such institutions as the Paris Club, which facilitates the quick resolution of fiscal crises. But China has resisted joining such bodies, instead working through problems on an ad hoc basis. That hasn’t always been easy. Debt diplomacy seldom is, and China is finding that the role of benefactor can ultimately carry a hidden price.

The hype of the BRI’s early years has given way to a more sober assessment of the costs and benefits of engagement with China, as its partner countries find the role of an aspiring hegemon goes beyond just doling out goodies. Many countries still find it useful to have a rival pole they can play off against the US-led alliance, but Italy’s recent reconsideration of its participation in the BRI can probably be seen less as an instance of the Western allies circling the wagons, than of many countries rethinking the degree of dependence on China they’re willing to countenance. China has built its soft power and cut its teeth on diplomacy, but it too is finding that the fun part of the BRI may now be over.

Last year, the Ukrainian government essentially outsourced the entire post-war “reconstruction” process to BlackRock, the world’s largest asset management firm. They signed an agreement to “provide advisory support for designing an investment framework, with a goal of creating opportunities for both public and private investors to participate in the future reconstruction and recovery of the Ukrainian economy”. In February, J.P. Morgan was brought on board as well.

The two banks will run the Ukraine Development Fund, which aims to raise private investment in projects potentially worth hundreds of billions of dollars across sectors including tech, natural resources, agriculture and health. BlackRock and J.P. Morgan are donating their services, but, as the Financial Times noted, “the work will give them an early look at possible investments in the country”. The opportunities are significant, particularly in the agricultural sector: Ukraine is home to a quarter of the world’s chernozem (“black earth”), an extraordinarily fertile soil, and before the war it was world’s top producer of sunflower meal, oil and seed, and one of the biggest exporters of corn and wheat.

From certain perspectives, the war is clearly good for business: indeed, the greater the destruction, the greater the opportunities for reconstruction. At Davos this year, Larry Fink, CEO of BlackRock, said he hoped the initiative would turn the country into a “beacon of capitalism”. David Solomon, CEO of Goldman Sachs, also spoke cheerily of Ukraine’s post-war future. “There is no question,” he said, “that as you rebuild, there will be good economic incentives for real return and real investment.”

Seeing opportunity amid the tragedy, 500 global businesses from 42 countries have already signed the Ukraine Business Compact “to help realise its huge potential” — or secure their slice of the Ukrainian pie. “Most are standing on the sidelines for now, given the security threat,” the FT reported. “But there are already companies on the cusp of moving in — especially in the low-hanging-fruit industries of construction and materials, agricultural processing and logistics.”

Over the years, across a series of similar events, Western governments and corporate leaders have made no secret of their enthusiasm to use the post-Maidan regime — and now the war — to radically alter Ukraine’s political economy. The agenda: to open up the country and make it safe for Western capital by transforming it into a special economic zone. This neoliberal shock therapy should, in their view, include “strengthening the market economy”, “decentralisation, privatisation, reform of state-owned enterprises, land reform, state administration reform”, and “Euro-Atlantic integration”, as well as widespread “deregulation” and the slashing of “outdated labour legislation leading to complicated hiring and firing process, regulation of overtime, etc”. In short, the Washington Consensus on steroids.

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This programme has, arguably, been underway since the mid-Nineties, when the West used IMF loans-cum-conditionalities to impose on Ukraine, just as it did on Russia, a series of radical free-market-minded reforms that crippled the economy. As the Indian economist Prabhat Patnaik has pointed out, the IMF played a key role in precipitating the 2014 crisis: Ukraine’s then-President, Viktor Yanukovych, refused to accept IMF demands that he cut wages, slash social spending and end gas subsidies in order to integrate with the EU, and turned instead to Russia for an alternative economic agreement. This was the backdrop for the Western-backed Euromaidan protests and, eventually, the 2014 regime change.

After 2014, the West’s economic agenda was stepped up once again. Western multinationals had long had their eyes on Ukraine’s vast agricultural wealth, but a 2001 moratorium on the sale of land to foreigners had always represented an obstacle to unrestrained privatisation. As post-Maidan governments turned again to the IMF for financing, aid was conditioned on a series of land reforms that would finally allow foreign corporations to acquire vast tracts of the country’s farmland. In the 2015 TV series, Servant of the People — which starred Zelenskyy as the fictional president, Goloborodko — the conditions required by the IMF for a new loan are rejected and the Western delegation is expelled. But in reality, things went rather differently. In 2020, Zelenskyy gave in to the IMF’s demands and finally repealed the moratorium.

“Agribusiness interests and oligarchs will be the primary beneficiaries of such reform,” said Olena Borodina of the Ukrainian Rural Development Network. “This will only further marginalise smallholder farmers and risks severing them from their most valuable resource.” But the World Bank could barely contain its excitement, gushing: “This is, without exaggeration, a historic event.” Even though the new law isn’t set to come into force until next year, US and Western European agrobusinesses have already bought up millions of hectares of Ukraine’s farmland — with 10 private companies reportedly controlling most of it.

As war has raged, the West’s calls for “structural reforms” in Ukraine have only intensified. In mid-2022, the Center for Economic Policy Research (CEPR), an influential European think tank, published a report, Macroeconomic Policies for Wartime Ukraine, which argued that Ukraine’s aim should be “to pursue extensive radical deregulation of economic activity”. Even more troublingly, according to the Oakland Institute economic observatory, Western financial aid “is being used as a leverage by the financial institutions to drive post-war reconstruction towards further privatisation and liberalisation reforms”. The European Union, for example, made it clear that the bloc’s decision to suspend interest payments on Ukraine’s loans would only be activated if there were “compliance with political prerequisites” with regard to labour reforms, for example, and the privatisation of state assets.

It came as no surprise, then, when last year the Ukrainian government adopted wartime legislation to severely curtail the ability of trade unions to represent their members. It gave employers the right to unilaterally suspend collective agreements and effectively exempted the vast majority of employees from Ukrainian labour law — a dramatic rollback for workers but a boon for global capital. Western governments have silently consented to the reforms and, in fact, leaked documents from 2021 indicate that the UK, via its development aid arm, UK Aid, and its embassy in Kyiv, was funding consultants to assist the Ukrainian government in selling the labour market reforms to the people.

As the Ukrainian government has simplified and accelerated the privatisation of state-owned enterprises, Zelenskyy would seem to have gone out of his way to similarly express the country’s “openness” to Western capital. Last September, he virtually opened the New York Stock Exchange, symbolically ringing the bell via video stream. He used the occasion to present “Advantage Ukraine”, his government’s new investment initiative (which relies on another British firm, WPP, for its marketing side). Zelenskyy said that his country was “open for business” — that is, for foreign corporations to come and exploit its resources and cheap labour. “I committed my administration to creating a favourable environment for investment that would make Ukraine the greatest growth opportunity in Europe since the end of the Second World War,” he wrote in the Wall Street Journal. Predictably, the president of the NYSE Group, Lynn Martin, wholeheartedly welcomed Ukraine’s decision to offer “unfettered access to capital”.

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In January this year, addressing the participants of the meeting of the National Association of State Chambers, Zelenskyy described American business as the “locomotive that will once again push forward global economic growth”. No one would blame Zelenskyy for choosing the lesser of two evils here: Western banks over Russian tanks. Yet, the grim fact remains that even if his nation succeeds in repealing the Russian invasion, the future in store for Ukraine is not necessarily one of sovereignty and self-determination but, most likely, one of Western economic tutelage.