The Second Cold War w/ Seth Schindler
How the U.S.-China rivalry will reshape globalization
Seth Schindler is Professor of Urban Politics and Development at the University of Manchester. He focuses on large-scale urban and regional transformation initiatives that integrate cities into transnational territorial and economic systems. National governments increasingly reassert their authority to regulate economic actors and enact development plans. Many governments have embraced industrial strategies that are ‘spatialized,’ insofar as they include plans to integrate territory into global production and trade networks. Furthermore, heightened geopolitical rivalry has forced many governments to balance economic and geostrategic objectives. These trends are transforming global economic geography, and Seth seeks to understand how cities and urbanization are impacted.
Seth also co-founded the Second Cold War Observatory (SCWO). It is a global network of scholars whose research explores how geopolitical rivalry influences people and places worldwide. He was also co- director of research of the African Cities Research Consortium, a six-year programme funded by the UK’s Foreign, Commonwealth and Development Office, which generates new insights and approaches to tackle complex problems in Africa’s rapidly changing cities.
Kelly Zhuang: How do you conceptualize the “Second Cold War” and how does it differ from the original Cold War in terms of structure, objectives, and strategies?
Seth Schindler: The term “Second Cold War” was developed along with colleagues as a response to debates among American scholars, particularly those close to the policy establishment in Washington, who kept returning to the question of whether ‘cold war’ was an appropriate analogy for the U.S.-China rivalry. We found that framework unsatisfying. Instead of asking whether this is or isn’t like the Cold War, we took a process-based approach. Just as World War I and World War II were discrete events but part of a broader historical arc, we think it makes more sense to view the Cold War and contemporary U.S.-China rivalry as distinct but connected episodes in a longer negotiation over global power.
The first Cold War was rooted in territorial competition, shaped by the Yalta Conference, where Churchill, Roosevelt, and Stalin divided the world into spheres of influence that gradually hardened into blocs. U.S. strategy centered on containment while the Soviets feared capitalist encirclement. After the Cold War, the Western liberal order expanded globally. There was a strong belief, popularized by figures like Thomas Friedman, that economic integration would reduce geopolitical tensions. The idea was that no country would risk alienating investors or interrupting trade by engaging in conflict. This belief dominated U.S. foreign policy during the unipolar era.
But all of that changed with the Trump administration’s 2017 National Security Strategy, which marked a sharp departure from the previous decades of engagement. The administration rejected the idea that deeper integration with China would lead to liberalization or its alignment with Western norms. At the same time, Trump administration officials acknowledged that China couldn’t be contained. Then Secretary of State Mike Pompeo even stated that China was “already within our borders.”
This paradox, rejecting engagement while admitting containment was impossible, left U.S. strategy adrift. As a result, a new approach emerged: not rolling back globalization but seeking to renegotiate it. The goal became controlling the networks that sustain globalization. Both the U.S. and China now aim to influence key transnational systems, specifically, infrastructure, production, finance, and digital networks, which are increasingly seen as the core sources of geopolitical power in the 21st century.
For example, China has surged ahead in infrastructure with its Belt and Road Initiative, while the U.S. still dominates financial networks, though the durability of that dominance is up for debate. Recent events, like Trump’s announcement and cancellation of tariffs, reflect efforts to reshape global trade and finance flows. In terms of production, the Biden administration focused on controlling geostrategic sectors like semiconductors, seeking to bring parts of that supply chain back to the U.S.
At its core, the Second Cold War is a contest to reshape globalization, not by ending it, but by determining who controls the critical connections, nodes, and flows. Only the U.S. and China have the capacity to compete on a truly global scale, though regional powers and firms also play major roles in shaping these systems. And of course, just because these are the objectives doesn't mean either country will succeed; many other actors, including the EU and multinational corporations, influence the outcome.
KZ: It’s refreshing to zoom out and think about how this rivalry plays out across global systems rather than just between two states.
That said, I’d like to return to the idea of geostrategic globalization, especially in contrast to the neoliberal model we’ve long taken for granted. For background: how would you define geostrategic globalization, and how does this shift impact the way multinational corporations operate and make strategic decisions in the current geopolitical climate?
SS: To understand geostrategic globalization, we first have to revisit what neoliberal globalization looked like. Neoliberalism emerged as a dominant paradigm in the 1980s, with roots in the 1970s. It’s not just an economic model, it’s a set of institutions, ideologies, and practices grounded in the belief that markets allocate goods and services more efficiently than states. Based on this assumption, neoliberalism promoted a clear division between economics and politics. Markets were to operate independently, free from state interference, whether that came from elected governments or technocratic institutions.
In this context, institutions were created to establish a kind of firewall between national politics and global markets. Multinational corporations (MNCs) operated in an environment where national borders mattered little. Many governments, especially those facing debt crises, were pressured by the IMF and World Bank to liberalize their economies, deregulate markets, and roll back the state. This created an unprecedented level of freedom for MNCs, allowing them to determine the geography of production based on cost and capability, what some scholars call the cost-capability ratio.
It was during this time that previously vertically integrated firms beg an outsourcing major components of their production processes. Instead of owning and operating all stages of production, companies coordinated vast supplier networks, especially in East and Southeast Asia. This gave rise to what scholars term global production networks, distinct from simple value chains. A company like Apple, for instance, doesn’t manufacture most of its products; it adds value by coordinating and managing an enormous network of global suppliers and subcontractors scattered around the globe.
In the neoliberal era, the firewall between markets and politics also meant that elected governments had limited capacity to influence or regulate global firms. As scholar Quinn Slobodian puts it, the global economy became “encased” from democratic politics. People could vote, but their elected representatives were restricted from interfering with the market's logic, at least at the global scale. Economic outcomes, such as the distribution of jobs or industrial investment, were shaped largely by market forces rather than political mandates.
This logic was upended by the Biden administration. National Security Advisor Jake Sullivan introduced the idea of a “small yard and a high fence,” signaling a profound shift in U.S. economic policy. The idea was that a narrow set of economic sectors, like semiconductors, were so critical to national security that the state could no longer leave them to market forces. Instead, the U.S. government would take an active role in determining where and how these goods were produced. If that meant overriding market forces, so be it. The geography of production in strategic sectors would now be shaped by state policy, not by firms acting independently and responding to market signals.
Semiconductors are perhaps the clearest example of this shift. The U.S. made clear that even if it was more cost-effective to produce them in China or elsewhere in Asia, that would no longer be acceptable. This effectively dismantled the neoliberal firewall and reintroduced strategic considerations into global economic decision-making. Over time, the scope of this “small yard” expanded to include AI, biotech, quantum computing, and aspects of pharmaceuticals, sectors viewed as essential to national power in the 21st century.
This is what we mean by geostrategic globalization. It doesn’t mean states control everything, but they now actively shape globalization’s trajectory, especially in the most critical and contested sectors. Like neoliberal globalization, this too relies on incentives. Governments are not issuing commands to corporations; instead, they’re using tools like export controls, investment screening, and industrial subsidies to influence corporate behavior. In the past, firms were incentivized to offshore and integrate into global production networks. Today, the incentives encourage reshoring or at least diversifying away from politically sensitive geographies like China.
KZ: What role do multinational corporations (MNCs) play in shaping contemporary globalization under current geopolitical tensions?
SS: Firms now face an entirely new opportunity structure shaped by geopolitical risk. Global companies can no longer ignore the strategic dimensions of their supply chains and operations. In response, firms have adopted two broad strategies. Some try to stay above the fray, maintaining access to both U.S. and Chinese markets while avoiding political entanglements. Lead firms like Apple publicly assert neutrality while quietly adjusting, shifting production from China to countries like Vietnam and India. This reflects an effort to hedge against rising geopolitical tensions without losing access to two of the world’s largest and most technologically advanced markets.
Other firms choose to lean into the rivalry, aligning with national industrial policies in hopes of securing subsidies and strategic support. Intel is one such case. Despite struggling in key markets like high-end AI chips and processors for smartphones, Intel has embraced the U.S. government’s industrial strategy, hoping to reverse its market position through alignment with geostrategic objectives. Programs like the CHIPS Act offer subsidies to firms willing to relocate or expand production within the U.S., and firms that struggle commercially often see this as a lifeline.
Ultimately, geostrategic globalization signals the end of the era when firms operated above and beyond politics. Today, the landscape is being redrawn by governments that view strategic sectors as too important to be left to market forces alone. Corporations are now embedded within competing national strategies, and their decisions, where to invest, where to produce, and whom to partner with, are increasingly shaped by geopolitics as much as by profit.
KZ: If the U.S. strategy to incentivize reshoring primarily appeals to firms that are already struggling, how effective can it really be in reshaping production geography or revitalizing key sectors domestically?
SS: I think the semiconductor sector is a particularly instructive case here, not least because it's one of the most extensively studied. We've seen some leading firms, beyond Intel, announce major investments in the United States. TSMC, for example, has committed to building production facilities in Arizona, and by any standard, it is a global leader. But the key questions are: will these investments fully materialize, and what exactly will they involve? Are we talking about cutting-edge chip manufacturing, or will these U.S.-based operations produce less advanced chips? At this point, it appears that the chips to be manufactured domestically are not at the technological frontier.
So, from a national security perspective, it may still be too early to say whether these policies are successful. However, what we can already observe is a shift in the geography of production. In that sense, the policy is having a real effect. Whether it’s considered a “success” depends entirely on who you ask and what metric you're using. If you ask residents of Ohio or Arizona, where Intel and TSMC are building or expanding facilities, they might very well say the policy has worked. It’s bringing investment and jobs to their communities, and the fact that these aren’t the most advanced chips may not matter to them.
That’s why the question of whether the strategy is “working” is so complex. Are we evaluating it in terms of national security, regional economic development, or global industrial competitiveness? The answer will vary depending on whose perspective you prioritize.
That said, I don’t think we’re seeing a wholesale transformation of global production networks. Leading firms are unlikely to be swayed by what is, relatively speaking, a modest level of financial support from the U.S. government. Instead of making radical shifts, many firms are cautiously adjusting their location strategies. A notable trend is the rise of Vietnam as an assembly platform in what scholars call a “China Plus One” strategy. This allows companies to maintain close proximity to China’s dense and advanced supplier networks without being directly exposed to the geopolitical risks of operating inside China itself.
Of course, Vietnam isn’t immune to political pressure either—it was recently targeted by significant tariffs by the Trump administration. But at the moment both U.S. and Chinese firms need places where they can do business and cooperate. The IMF refers to countries like Vietnam, Mexico, and Hungary as “connector countries”—locations that offer strategic advantages in navigating shifting geopolitical landscapes. So while I’d be cautious about declaring the U.S. strategy a clear success, it’s undeniable that it has already begun to reshape global production geography in important ways.
KZ: You argue that many countries in the Global South are pursuing strategies of “poly-alignment” to benefit from both the United States and China. Could you elaborate on how these countries are leveraging their strategic importance and what risks this strategy entails?
SS: Many leaders in the Global South have been explicit in saying they do not want to choose sides in the U.S.-China rivalry. Leaders like Brazil’s President Lula, Indonesia’s former President Jokowi, and Senegal’s former President Macky Sall have all expressed similar sentiments. And this position makes perfect sense. The U.S. and China are the world’s two largest economies, and many countries in the Global South have cultivated deep and interdependent ties with both during the era of neoliberal globalization. It would be economically and diplomatically counterproductive for them to sever those connections by aligning exclusively with one side.
For most countries in the Global South, the U.S. and China are simultaneously critical sources of investment, trade, development aid, and diplomatic engagement. This is a very different dynamic from the original Cold War. Back then, many newly decolonized states feared that becoming entangled in superpower politics would compromise their sovereignty. During the 1955 Bandung Conference, Indonesian President Sukarno warned that involvement in great power politics could erode the hard-won sovereignty of post-colonial nations. He argued that countries in the Non-Aligned Movement should to keep both the U.S. and the Soviet Union at arm’s length.
Today, however, the logic has reversed. Countries are not trying to distance themselves from both powers; rather, they are striving to remain deeply engaged with both. My colleagues and I refer to this strategy as poly-alignment. Unlike the Cold War-era concept of nonalignment, poly-alignment reflects an intentional effort by countries to maintain strong and simultaneous relationships with both the U.S. and China, leveraging ties to each without falling into exclusive dependence on either.
Türkiye offers a clear example of this. It is a NATO member and purchases energy from Russia, has aligned aspects of its infrastructure planning with China’s Belt and Road Initiative, and yet remains deeply connected to European industrial networks and Wall Street financial markets. So, how and with whom is Türkiye aligned? It is poly-aligned, navigating multiple, and at times competing, partnerships simultaneously. Many other countries exhibit this same pattern.
That said, much of today’s poly-alignment is happening by default rather than by design. During the unipolar era of neoliberal globalization, states became deeply integrated with various global systems and networks, often without a deliberate, unified strategy. For example, a country’s Ministry of Transportation might be closely tied to Chinese infrastructure firms due to China's global dominance in that sector, while the Ministry of Finance or Central Bank may operate through U.S.-led financial institutions. These differing alignments emerged from institutional priorities, not a coordinated national strategy.
Moving forward, I believe countries in the Global South will need to develop more deliberate connectivity strategies. This means thinking strategically about which global networks to plug into, in which sectors, and for what goals, rather than defaulting to legacy relationships based on past integration patterns. This is essential for maintaining agency in an increasingly contested and bifurcated global environment.
However, poly-alignment is not without its risks. Both the U.S. and China are actively trying to discourage poly-alignment, albeit in different ways. Under the Trump administration, the U.S. exhibited more overt pressure tactics, sometimes bordering on bullying. South Africa, for instance, received particularly sharp attention.
One of the clearest arenas where this tension plays out is in digital infrastructure. Many countries would ideally like to mix Chinese hardware, such as Huawei’s telecommunications equipment, with Silicon Valley software and platforms. Huawei’s hardware is affordable, effective, and widely accessible, but these countries still want the innovation and reach of American tech ecosystems. However, both the U.S. and China are pushing back against this blended model. They’re doing so not only through political pressure but also via technical measures that limit interoperability, making it more difficult to combine components across the two systems.
This push to discourage poly-alignment is more complex now than it was during the Cold War. Back then, countries were aligned with one bloc, and if they changed sides after a coup or revolution they would reorient all of these systems. During the Cold War it would have been unthinkable for a country to host a Soviet-controlled port and at the same time integrate into U.S.-led financial markets. But today, that kind of dual integration is not only possible—it’s common.
What makes this era particularly volatile is how quickly network orientation can shift. In contrast to Cold War realignments, which often followed coups or revolutions, today, a simple parliamentary vote can change a country’s digital infrastructure policy or cancel a port agreement. The UK’s decision to strip Huawei from its telecom networks is a recent example. These decisions can unfold overnight, and because of that, efforts by the U.S. and China to enforce exclusivity are much harder to sustain.
In sum, countries in the Global South are navigating a very different geopolitical terrain than in the past. Rather than withdrawing from great power politics, they are engaging both major powers in ways that enhance their leverage. But doing so requires increasingly careful calibration, particularly as both Washington and Beijing become more assertive in shaping the terms of global engagement.
KZ: How is the U.S.-China rivalry impacting the Global South, particularly Africa? How do countries in these regions navigate the competing offers from the United States and China, and what agency do they possess in this rivalry?
SS: The case of South Africa is quite complex and, interestingly, not necessarily driven by the U.S.-China rivalry in the way one might expect. Recent tensions appear to be more closely linked to South Africa’s case against Israel at the International Court of Justice, and there are also domestic political dynamics at play, such as issues surrounding Elon Musk and regulatory barriers to launching Starlink there. The full story is still unfolding, and we don’t yet have a complete understanding of what’s driving U.S. behavior toward South Africa. What we do know is that South Africa has received particular attention from the Trump administration in the past three months, though it’s not entirely clear whether this focus is strategic or circumstantial.
That said, the broader U.S.-China rivalry is indeed playing out across the African continent, even if South Africa’s situation may be somewhat exceptional. While it's still too early to assess how the Trump administration’s Africa policy will evolve, given it's only been in power for three months, we can look to the Biden administration's approach for insight into recent U.S. efforts to counter Chinese influence in Africa.
A key pillar of the Biden administration’s strategy was the Lobito Corridor—an initiative aimed at revitalizing and integrating Central Africa’s Copperbelt (in Zambia and the Democratic Republic of Congo) with the Atlantic coast of Angola. The goal was to repair existing infrastructure and build out the missing links to create a seamless economic corridor for trade and resource export. This corridor is intended to compete directly with China’s longstanding infrastructure efforts in East Africa, particularly the TAZARA Railway, which dates back to the 1960s and connects Zambia to the port of Dar es Salaam in Tanzania. That railway was China’s first large-scale overseas infrastructure project and continues to receive Chinese investment today, alongside other infrastructure ventures in Tanzania, Zambia, and Kenya.
The U.S. approach to the Lobito Corridor, however, differs significantly from China's. Rather than directly funding and building the infrastructure, the U.S. seeks to catalyze private investment. Much of the financing comes from the U.S. Development Finance Corporation (DFC), whose goal is to “de-risk” infrastructure projects that private investors would otherwise avoid due to perceived political or economic instability. For example, the DFC insures investors against political risk. In theory, this is meant to attract private capital to strategic infrastructure projects by offering risk-sharing mechanisms and investment guarantees.
But this approach has largely fallen short in practice. One major challenge is that the U.S. lacks the industrial and construction capacity to match China’s scale. The largest U.S. construction firms are relatively small, and construction is not a politically influential sector in Washington. In contrast, China’s infrastructure ecosystem is deeply integrated; its construction, finance, and insurance sectors operate as a more coordinated apparatus, enabling Beijing to implement complex transnational infrastructure projects with greater speed and coherence.
So while the U.S. has made efforts to respond to China’s Belt and Road infrastructure dominance in Africa and beyond, its success has been limited. Without the physical capacity or political will to directly build, the U.S. is left relying on financial tools to encourage private-sector-led development, an approach that, so far, has not matched China’s more vertically integrated and state-driven model.
KZ: How has the U.S.-China rivalry shaped the global contest over strategic infrastructure and digital systems? What are the implications of this “network-based” competition for global supply chains and governance?
SS: I think neither the U.S. nor China intends to roll back globalization entirely. Even under the Trump administration, there was a recognition that China is, and will remain, a global actor. What the U.S. hopes to do, especially under the Trump-era strategic logic, is not to eliminate China’s presence, but to reduce Chinese actors to economic actors and prevent them from exerting influence over strategic transnational networks.
Take, for example, China’s involvement in global ports, which has become a major geopolitical flashpoint. Many ports around the world are now owned or operated by Chinese firms, some of which are state-owned enterprises. One recent case involved a Hong Kong-based firm, CK Hutchison, which operates ports along the Panama Canal. After concerns were raised by Donald Trump about China’s influence over the canal, the firm agreed to sell its operating rights to BlackRock, a U.S.-based financial company. This highlights the U.S. administration’s concern, not necessarily with the firm's commercial activities in general, but with where those activities are taking place.
The key question here is whether a firm like CK Hutchison is simply an economic actor or a geopolitical actor. In a location as strategically vital as the Panama Canal, U.S. officials tend to see it as the latter. However, they likely wouldn’t object to the same firm operating ports elsewhere, ports that don’t carry the same strategic weight. The issue is less about Chinese firms participating in global trade and more about who controls critical nodes and connections within global infrastructure networks.
This logic extends beyond physical infrastructure to digital systems. A good example is Logink, a Chinese digital platform used across many ports operated or frequented by Chinese companies. Logink functions much like other logistics platforms: it connects shippers, receivers, and regulators, facilitating compliance with national regulations and improving efficiency across complex global supply chains. But from the U.S. perspective, this integration of physical infrastructure (ports) with digital infrastructure (Logink) is highly strategic, and potentially threatening.
The concern is that platforms like Logink provide Chinese authorities access to sensitive data, including information about global trade flows and even U.S. military shipments, many of which pass through privately operated ports. This ability to observe and potentially disrupt logistics gives China more than just economic leverage; it gives it geostrategic control.
This is what scholars like Henry Farrell and Abraham Newman refer to as weaponized interdependence. The idea is that global interdependence isn’t symmetrical; some actors are more vulnerable than others depending on their position in key networks. If a country can control a critical point, a chokepoint like the Panama Canal or a dominant logistics platform, it can weaponize that position in a time of conflict or crisis.
So, what we’re really seeing is a competition to control these strategic nodes within global networks. Neither the U.S. nor China expects the other to vanish from global supply chains. Instead, the goal is to control the most critical points, those with the power to influence or interrupt flows, and to reduce the rival’s role to that of a passive economic actor. The competition is no longer just about trade or military posturing; it’s about shaping the architecture of globalization itself.
KZ: Looking ahead, what kind of global order do you see emerging from the current U.S.-China rivalry? Given how fluid and networked today’s competition is, how should countries position themselves to navigate these shifting dynamics and preserve their agency?
SS: One of the most important things to understand about today’s U.S.-China rivalry is that, unlike the first Cold War, the competition is not over territory; it’s over control of networks. And because of that, it’s nearly impossible to imagine a clear, comprehensive “victory” for either side in the way the Cold War ended with the dissolution of the Soviet Union.
During the Cold War, U.S. strategy was shaped by the domino theory, the fear that if one country fell to communism, its neighbors would follow. That logic led the U.S. to attempt containment everywhere: resisting the spread of Soviet and Chinese influence through proxy wars, military interventions, and even orchestrated coups. While it was brutal and costly, it was also linear and relatively slow-moving. You could identify where the next threat might emerge, plan accordingly, and react within a known framework.
Today’s rivalry is far more dynamic. If the Cold War was a game of dominoes, this new era feels more like Whack-a-Mole. Victories are fleeting and scattered. For example, one day, a U.S. policymaker might celebrate convincing the UK to remove Huawei from its telecommunications infrastructure. But the next day, Tanzania may sign a port deal with a Chinese firm. Perhaps then the U.S. wins another round by getting the Dutch government to block advanced chipmaking equipment from being sold to China, but almost immediately, a different country shifts its position in another domain.
That’s the nature of network competition: it is fluid, fast-moving, and decentralized. Unlike territory, which is static and visible, networks can shift overnight. Governments change, elections are held, and new leadership may cancel agreements or initiate new alignments. A country may abandon a Chinese port deal after an election, or alternatively, deepen ties with Beijing while maintaining financial relationships with Washington. This complexity makes it nearly impossible to draw clean lines or define long-term victories.
As a result, the global landscape is likely to remain a complex patchwork. Most countries don’t want to choose between the U.S. and China. Instead, they see clear benefits in maintaining relationships with both. The U.S. still offers unmatched advantages in areas like finance, security cooperation, and technology. China, on the other hand, brings unparalleled capacity in infrastructure, advanced manufacturing, and ties with emerging markets. We should expect countries to continue partnering with the U.S. for some needs and with China for others.
This rivalry will also increasingly play out through domestic politics. Geopolitical pressures are already being superimposed on national debates, and we’ve seen that vividly in countries like Georgia, where protests in Tbilisi recently reflected not just local grievances, but larger geopolitical tensions playing out through elections and civic mobilization. These aren’t abstract debates, they are real, grounded in lived experience, and capable of reshaping national trajectories.
Ultimately, we’re not heading toward a decisive end like the fall of the Berlin Wall. We won’t see one side “win” and the other collapse. Instead, we’re entering an era of ongoing contestation, fragmented, uneven, and deeply embedded in global and local systems alike. It will be a defining feature of international politics for years to come.
Kelly Zhuang is an intern at The Carter Center’s China Focus initiative.
The views expressed in this article represent those of the author(s) and not those of The Carter Center.
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That’s all from Atlanta. Y’all be good.
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