The New Cold War

Remy Maduit | Authors published

The New Cold War and the Rise of the 21st-Century Infrastructure State

Seth Schindler is Senior Lecturer in Urban Development and Transformation at the Global Development Institute, University of Manchester, UK
Jessica DiCarlo is a Researcher at the University of Colorado, Boulder, USA
Dinesh Paudel is an Associate Professor in the Sustainable Development Department at Appalachian State University, USA

Relations between the USA and China have steadily deteriorated in recent years, and competition and confrontation characterize nearly all aspects of the relationship. [1] A host of commentators have argued that the intensifying China-US rivalry heralds a “new Cold War.” [2] The Financial Times debuted a New Cold War Series, [3] dating its start to a speech delivered by US Vice President Mike Pence in 2018. Others point to introducing US tariffs on Chinese goods, the arrest of Huawei’s chief financial officer in Vancouver at the behest of American authorities, China’s crackdown on protesters in Hong Kong, or a speech by Mike Pompeo in which he stated that competition with China differs from the Cold War “in kind.” [4] In this paper, we take the qualitative differences between the new Cold War and its namesake as our entry point and focus on the influence of its territorial logic on third countries.

Zero-sum geopolitical competition to control territory animated the Cold War great power rivalry. From Truman to Reagan, American foreign policy focused on the “containment” of the Soviet Union [5], while Moscow aimed to prevent “capitalist encirclement”. [6] In contrast, geopolitical-economic competition characterizes the territorial logic of the current China-US rivalry to integrate territory and establish regional partnerships. We focus on one mode of this competition, the construction of connective transnational infrastructures such as railways, highways, and energy grids meant to expand and deepen production and trade networks. China burnished its credentials as a global leader in infrastructure finance and construction with the inauguration of the Belt and Road Initiative in 2013[7]), setting off alarm bells in the American political establishment. [8] The US scrambled to respond by establishing the International Development Finance Corporation and entering a series of bilateral agreements and multilateral frameworks surrounding infrastructure finance and construction. [9] The resulting China-US rivalry turns on competing for territorial visions of geopolitical-economic integration, and the outcome will profoundly influence how particular states and regions are drawn into the global economy.

Many countries have responded to this emergent territorial logic of great power rivalry by hedging their relationships with the USA and China. Often avoiding the appearance of taking sides, they seize opportunities to articulate and pursue long-standing spatial objectives. However, most times, these objectives are so complex and grandiose that their achievement causes “institutional calibrations, policy reorientations, and regulatory experiments,” or what Brenner refers to as “state restructuring.” [10] This includes rebalancing power within national institutions or establishing new ones, introducing regulatory reform to fast-track infrastructure projects, and augmenting state capacity. Indeed, competition between China and the USA surrounding large-scale infrastructure projects—particularly as the Belt and Road Initiative exploded in the past eight years—allows countries to undertake spatial projects that were unthinkable in the post-Cold War unipolar world order when the USA presided over the “liberal Leviathan”. [11]

State restructuring sometimes results in the emergence of what we refer to as the 21st-century infrastructure state, which pursues spatial objectives that enhance transnational integration through the mobilization of foreign loans and grants for cross-border infrastructure projects. These governments stake their legitimacy in part on their ability to realize developmental dividends through spatial projects while simultaneously navigating the fraught politics of the new Cold War in a way that avoids dependence on China, the USA, or regional powers, such as India and Japan. We illustrate these dynamics in Laos and Nepal, both low-income, landlocked countries that were historically considered isolated and weak, and whose location about Belt and Road Initiative corridors situate them within new Cold War competition.

This paper speaks to a growing body of scholarship on the “rise of China” and how the Belt and Road Initiative plays out globally. [12] Underlying our analysis is the assertion that the context shaping events and the production of space in many countries are not only the “rise of China” per se but also great power rivalry. As historians would struggle to explain the Vietnam War or the Soviet invasion of Afghanistan as a standalone event independent from the Cold War, future historians will probably contextualize the Belt and Road Initiative within contexts of power rivalry. In this changing geopolitical-economic context, our conceptualization of the infrastructure state advances geographical literature and debates in three key ways. First, we are in conversation with literature on the geopolitical economy and geopolitical-economic competition and its territorial manifestations. [13] We narrate the emergence of a new Cold War, discuss how it differs from its namesake, and emphasize its novel territorial logic. We then switch scales and present cases from Laos and Nepal to show how they have responded to shifting geopolitical-economic orders by hedging between more powerful states as they pursue spatial objectives that cause state restructuring. In doing so, we contribute to and complicate a growing body of scholarship that grounds Chinese infrastructure development and third-country responses. [14] Finally, by connecting events in Laos and Nepal to great power rivalry, our analysis is in scholarship that shows how governments respond to global events, and how their response manifests in space. [15] This speaks to a growing interest among geographers in the effects of geoeconomics and geopolitics on state power and we conclude by arguing that contemporary state restructuring produces the 21st-century infrastructure state. [16]

WHAT’S NEW ABOUT THE NEW COLD WAR?

[T]his isn’t about containment. Don’t buy that. It’s about a complex new challenge that we’ve never faced before. The USSR was closed off from the free world. Communist China is already within our borders. (U.S. Secretary of State Mike Pompeo, 23 July 2020)

Among a series of speeches by Trump Administration officials on escalating tensions with China, [17] Secretary of State Mike Pompeo was the most striking. He asserted that the US Government views the Chinese Communist Party as a major threat and noted that America’s competition with China differs from the Cold War “in kind.” [18] There are many differences between the new Cold War and its namesake. Most significantly, the USA and USSR were not economically matched. The Soviet Union had been devastated by the Second World War–its industrial output surpassed its pre-war level in 1950 and its population did not reach its pre-war level until 1956. [19] In contrast, the American economy expanded dramatically during the Second World War, and by 1945 “Americans, who made up only 7 percent of the world’s population, controlled more wealth than all the rest of humanity”. [20] Except for some defense-related sectors (e.g., aerospace), the US defined the boundaries of the technological frontier. [21] Finally, the US prevented allies and client states from establishing commercial relations with the USSR and isolated it economically. [22] The geopolitical-economic landscape today reveals a drastically unique picture between the USA and China. By some measures, China has already surpassed the USA in terms of GDP. [23] it is deeply integrated into the global economy, and many of its firms are technologically competent and operate at the frontier.

Throughout the Cold War, the overarching objective of American foreign policy was the containment of the USSR [24], and the USA cultivated a network of allies, and the client state’s military force bolstered its territorial integrity. The fear that they could be “lost” to communism was conceived as spaces on a chessboard whose designations as hostile or friendly were fluid and these states animated American policy. Losing a single country, they feared, could precipitate the rapid spread of Soviet influence as neighboring states could “fall” like dominos. This led the USA to counter communist expansion in places whose strategic value was not clear [25]; on the shifting perimeter of defense commitments, see Snyder. [26]

After the October Revolution, leadership in Moscow feared that military invasion would follow “capitalist encirclement” [27], a trope that was reintroduced during the Cold War. [28] Indeed, Soviet officialdom eyed the network of American allies that ringed its borders at the height of the Cold War wearily (i.e., South Korea, Japan, South Vietnam, Thailand, Pakistan, Iran, Turkey, and West Germany), and rebranded its overseas development program under the leadership of Nikita Khrushchev to establish alliances. [29] Support for revolutionary parties and governments complemented these efforts during the Brezhnev era. [30]

Given these differences, the stage is set for a particular type of competition between China and the USA. Most notably, the territorial logic of great power rivalry differs, because, as Pompeo’s quote shows, the USA cannot hope to “contain” China. [31] With the dissolution of the USSR, the USA became the singular pole of geopolitical power and secured what Ikenberry calls “liberal hegemonic order.” [32] This unipolar order proved durable because the USA provided international security, barriers to entry were low, and there was scope for other countries to influence its rules. [33] About China, American strategist Zbigniew Brzezinski argued in his 1997 book, The grand chessboard, that although the USA should not attempt to contain China, it should prevent it from challenging American hegemony in Eurasia. American attention was focused elsewhere, however, and the USA became bogged down in costly wars in Iraq and Afghanistan while it was also preoccupied with the “War on Terror” and threats posed by non-state actors. In addition, American geopolitical objectives in the late 1990s and early 2000s were not completely incompatible with China’s. [34] They cooperated on a range of issues and Washington sought to engage China in ways that would reward its integration in the unipolar world order and impose costs on aggressive behavior. [35]

The 2008 global financial crisis was a watershed moment that changed the course of US-China relations. Beijing responded to the sharp decline in global demand for Chinese exports with an unprecedented fiscal stimulus. According to Tooze, “[i]n 2009, for the first time in the modern era, it was the movement of the Chinese economy that carried the entire world economy”. [36] The investment was concentrated in public works and infrastructure projects, and some areas witnessed a such dramatic expansion of infrastructure endowments that they became saturated. [37] In response, Beijing renewed its commitment to spatially balancing the Chinese economy [38], and the country’s oversized construction sector expanded to new markets abroad. [39] Finally, flush with cash and domestic political clout, Chinese state-owned enterprises challenged their subordinate role in joint ventures with American multinationals. [40]

The Obama Administration embraced a multi-faceted approach to China that balanced engagement with containment. [41] The Trans-Pacific Partnership (TPP) was the cornerstone of this effort to engage China, and it introduced rules designed to “establish regulatory directives for protecting intellectual property, liberalize investments, set labor and environmental standards, and guarantee equal treatment of state-run enterprises”. [42] Meanwhile, the USA affirmed its commitment to counter any attempts by China to erode the sovereignty of its allies in East Asia. Although Washington acknowledged the challenges posed by China’s growing power, it still viewed China as a potential partner that could be engaged constructively–in Secretary of State Hillary Clinton’s words: “a thriving America is good for China and a thriving China is good for America”. [43]

Beijing interpreted the TPP as an attempt to stifle China’s growth and ambition and, in part, introduced the Belt and Road Initiative to establish “alternative security and economic arrangements that … exclude the United States … and circumvent a Western-led system”. [44] Announced by Xi Jinping in 2013, the Belt and Road Initiative is a series of terrestrial and maritime corridors that link resource frontiers and key markets with value chains anchored in Chinese- led firms. [45] A key objective is the Sino-centric orientation of territory, incorporating places into a geopolitical-economic territorial vision in several ways: as suppliers of inputs and raw materials, destinations for offshoring labor-intensive production processes, markets for Chinese exports (particularly value-added goods like high-speed rail), and sources of technology and knowledge. These designations are not mutually exclusive–for example, Vietnam is a potential market for high-speed rail and a destination for offshoring. [46] Thus, while places are incorporated differently, the Belt and Road Initiative’s corridors orient vast territories towards China and are anchored by key nodes such as special economic zones and logistics hubs. [47]

Trump’s abandonment of the TPP signaled a shift in US policy towards China, in which strategies of engagement and containment gave way to confrontation and competition. [48] Trump’s rejection of the principles on which the uni-polar liberal order had been established made it difficult to establish a coalition that could contain China [49], leaving Washington little choice but to compete. The Department of Defense advocated “whole-of-government action” [50] and warned that China “is actively competing against the United States and our allies and partners, in a political contest between those who favor repressive societies and those who favor free societies”. [51] The Department of Defense identified the Belt and Road Initiative as the primary mechanism whereby China advances its political and economic agenda. Former Vice President Mike Pence urged governments in Asia to align with the USA rather than China because “[t]he United States deals openly, fairly. We do not offer a constricting belt or a one-way road”. [52] Underlying this statement is the assumption that Chinese lending practices are “predatory,” a sentiment echoed by former National Security Advisor John Bolton [53], who accused China of engaging in “strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.” [54]

Despite its embrace of transactional diplomacy in an era of “America first,” the USA established several bilateral agreements and multilateral partnerships designed to counter the Belt and Road Initiative and limit China’s dominance in the infrastructure sector. In 2018, a bipartisan group of 17 Senators sent a letter to the Secretaries of Defense and Treasury [55], in which they argue: that “the [Belt and Road Initiative’s] goal is the creation of an economic world order ultimately dominated by China … As the largest contributor to the IMF.” The Senators asked, “how can the United States use its influence to ensure that bailout terms prevent the continuation of ongoing BRI [Belt and Road Initiative] projects or the start of new BRI projects?” The answer came in October 2018, when Trump signed a bill that enjoyed rare bipartisan support in Congress that created the International Development Finance Corporation (IDFC) to offer an “alternative to state-directed investments by authoritarian governments and United States strategic competitors.” [56] The US Government [57] subsequently clarified that its objective is to “provide a robust alternative to the Chinese state-directed, debt-heavy model … and help more American businesses invest in and open developing markets, including in places that are of key strategic importance to the United States.”

The inauguration of the “Blue Dot Network” by the US Overseas Private Investment Corporation (OPIC) in 2019, in collaboration with the Australian Department of Foreign Affairs and the Japan Bank for International Cooperation, reinforced these objectives. [58] The network aims to convene “governments, the private sector, and civil society to promote high-quality, trusted standards for global infrastructure development in an open and inclusive framework” and “strengthen development finance cooperation to support principles-based infrastructure and sustainable economic growth”. [59] Besides these multilateral frameworks, the USA entered bilateral agreements for “infra-structure finance and market building cooperation” with Indonesia, Taiwan, Singapore, and South Korea. [60] Finally, the US Department of Commerce launched the Infrastructure Transaction and Assistance Network to “support American companies as they compete for infrastructure projects abroad.” [61] The Biden Administration has embraced the notion that China is a great power competitor, and sought to respond to challenges from Beijing by repairing traditional American alliances). [62]

Under the leadership of Xi Jinping, a predominant view in Beijing is that China is a “civilizational state” [63] whose rise to great power status is inexorable. [64] Despite concerns among some Chinese scholars that the Belt and Road Initiative represents a “strategic overstretch” [65], a multipolar version of globalization will be at least more Sino-centric than the post-Cold War era. From this perspective, Dunford and Liu argue that the Belt and Road Initiative represents a “quest for ‘win–win’ economic cooperation and common development achieved through the advancement of connectivity in a multiplicity of fields, rather than through rule-governed liberalization and privatization in a unipolar world”. [66] This multipolar vision of Sino-centric globalization and the American preference for unipolar international order are mutually exclusive. In the next section, we shift the focus from bipolarity to examine how other countries respond to China-US rivalry.

The Emergence of the 21st-Century Infrastructure State

Great power rivalry is playing out across Eurasia, and although some governments face risks of co-optation and dependency, it also afforded them opportunities to advance national development plans. We present cases from Laos and Nepal and show that the new Cold War provides conditions that allow governments to pursue spatial objectives. In both countries, the state could not initially plan and undertake infrastructure projects of significant scope and complexity. To do so required external help that often required a state restructuring, which we suggest results in the emergence of the 21st-century infrastructure state.

Great power rivalry poses risks for small states, but it also presents opportunities if they can hedge between multiple principles. [67] Scholars have shown that through relations with both the USA and China, states seek to maximize security and rewards by avoiding actions that suggest they are choosing sides. Doing so mitigates the risks of entrapment, abandonment, and domestic resentment. Hedging helps governments navigate between powerful states, but it is not merely an act of self-preservation. [68] It also allows governments to react to demands from domestic interest groups. [69] In the new Cold War, states employed hedging strategies to secure support for transnational infrastructure projects that would not be possible without external support because of their cost and complexity. In short, this means that spatial projects such as the Belt and Road Initiative and the Greater Mekong Subregion are not simply hegemonic impositions, but they are “co-produced” with and within third states—and powerful interest groups and classes within them—in pursuit of independent development and policy objectives. [70]

Where governments lack experience in undertaking ambitious spatial planning schemes, the realization of large-scale infrastructure projects causes significant “institutional calibrations, policy reorientations, and regulatory experiments”. [71] Brenner [72] refers to this process as “state restructuring,” which he conceptualized to show how European states responded to the tectonic shift from Keynesianism to neoliberalism by “attempting, at various spatial scales, to facilitate, manage, mediate, and redirect processes of geoeconomic restructuring”. [73] The recent emergence of a multipolar order and the onset of the new Cold War is a correspondingly significant inflection point for many states. In Brenner’s [74] research, European states dismantled regimes geared toward balanced regional growth, or “spatial Keynesianism,” in favor of national development strategies that sought to harness the dynamism of globally competitive cities and regions. In contrast, states respond to the emergent multi-polar order by introducing a series of reforms designed to enhance their ability to realize longstanding spatial objectives through great or regional powers. This involves (1) centralizing power through the establishment of new bureaucracies and/or disempowering certain institutions that may hinder the implementation of large-scale infrastructure projects, (2) regulatory reform that streamlines the project lifecycle from planning to implementation, and (3) enhancement of capacity in certain public institutions to create what Hickey calls “pockets of effectiveness.” [75] Through restructuring, these governments assume the role of the primary agents of development and modernization in their respective societies, and they manifest their power in envisioning, constructing, and using the infrastructure. [76] Guldi [77] dubbed Britain the original “infrastructure state,” arguing that 18th-century domestic road-building efforts remade territory by integrating national economic space. She shows how newly established institutions and bureaucracies mobilized domestic capital and “pioneered novel forms of government centralization, expert rule, and technology”. [78] The 21st-century infrastructure state seeks to mobilize foreign capital—both grants and loans–to undertake infrastructure projects that enhance transnational connectivity.

We now turn to Laos and Nepal, both of which are typically viewed as economically poor, politically weak, and historically isolated. However, they are subject to geopolitical-economic contestation and both governments have staked legitimacy on their ability to realize a vision of socio-economic transformation and development through the construction of infrastructure projects that enhance transnational connectivity and facilitate industrialization and urbanization. We first suggest that we must contextualize the construction of infrastructure in long histories of state spatial strategies in Laos and Nepal that inform current state restructuring. We then show how governments navigate China-US rivalry as they enact state restructuring schemes in pursuit of spatial objectives.

The débloquement of Lao territory [79]

Laos views China’s offer as a not-to-be-missed opportunity to drive its ambition to integrate into the global economy. The Lao government needs the Belt and Road Initiative to transform from its land-locked status into a land-linked country so that Laos can make use of every opportunity to build a modern economy and alleviate poverty.

In November 2017, Xi Jinping visited Laos, marking the first foreign visit of his second term and the first time a Chinese head of state visited Laos in 11 years. During the visit, Xi and Lao President Vorachit signed the Laos–China Master Plan, which includes a range of transportation, energy, agriculture, tourism, commercialization, banking, and industrial park projects. This agreement deepened China’s involvement in Laos–by late 2017, the Export-Import Bank of China had nearly140 loans with a contract value of over 55 billion yuan in Laos. [80] Although the prospect of increasing debt and dependence on China has raised concerns in Laos [81], President Vorachit praised the initiative as compatible with Lao policy at the Second BRI Forum. Alignment with the Belt and Road Initiative is touted as an opportunity to realize the objective of transforming the country from landlocked to land-linked.

Laos’ objective to become land-linked has deep roots that lend legitimacy to state development visions. The country has long been defined by its relative isolation from more economically prosperous neighbors, identified by regional powers as a buffer or a bridge. [82] Considered a “colonial backwater” by France, administrators aimed to achieve the mise en Valeur [83] of Lao territory through the construction of transportation infrastructure and trading posts. [84] The mountainous terrain in the north and east and the challenges of Mekong River travel motivated attempts of débloquement or “unblocking” Laos by developing roads to access natural resources. [85] Colonial road projects in the 1930s oriented Laos away from Siam in favor of Indochina and were described as “the beginning of a new era where Laos, liberated from its isolation, freed from hindrances, will occupy its legitimate position in the Indochinese family”. [86] Stuart- Fox [87] contends that myths of fabulous resource wealth were promulgated to justify expansion via “infrastructure of colonial control” that consisted of roads, administrative posts, and barracks that every male aged 18–60 was required to build.

Spatial objectives shifted during the Cold War as the USA viewed technological assistance as a tool to inhibit the spread of communism in the region. The US Bureau of Reclamation and State Department, through initiatives like the Mekong Valley Project, established river basins as sites of technical intervention through large hydropower projects. Despite the stated developmental purpose of these interventions, the underlying geopolitical rationale to counter communist influence is well-documented. [88] However, on 2 December 1975, Pathet Lao’s [89] declaration of the Lao People’s Democratic Republic placed the country firmly in the regional socialist bloc, solidifying “fraternal” relations with communist neighbors, particularly Vietnam.

The late 1980s shift toward neoliberal policies, opening to foreign investment, and an influx of multilateral organizations resurrected state spatial objectives of transforming landlocked Laos into a regional bridge. The Association of Southeast Asian Nations (ASEAN) and Asian Development Bank’s (ADB) Greater Mekong Subregion Initiative (GMS) portrayed Laos as a potential logistics hub and energy provider (i.e., “battery of Asia”) in a regional division of labor. Both ASEAN and the GMS identified Laos as a country with the latent economic potential to be unlocked by enhancing connectivity. Infrastructure development, one of ASEAN’s pillars for economic integration, promised to enhance the supply side of the economy, reduce reliance on mining, and foster pro-poor growth [90]; meanwhile, the GMS planned economic corridors of roads, railways, and logistics infrastructure. Laos is at the heart of the GMS, and so seemed poised to receive infrastructure investment, as regional integration became the primary “vehicle by which landlockedness [could] be transformed from a national liability into a national asset”. [91]

The Lao government prioritized “graduating” from a Least- Developed Country in the 1990s, and five-year National Socio-Economic Development Plans cite infrastructure investment as a catalyst to achieve developmental goals. They celebrated roads as a silver bullet to foster economic growth through global economic integration, while also drawing people closer to local and regional markets and reducing poverty. [92] Between 1990 and 1995, over half of the public investment went to renewing or constructing 2,000 km of roads [93], and another 1,000 km were added from 1995 to 2000. Public spending on infrastructure, however, decreased in the 2000s as Laos attracted foreign investment under the slogan “turning land into capital,” whereby investors developed infrastructure for land or resource rights. [94] In this context, China increased investments and is now the largest investor, the largest provider of aid, and the second-largest trading partner. More recently, Chinese FDI has grown as firms seek alternative manufacturing sites to avoid US tariffs that resulted from the US-China trade dispute. [95]

Consistent with its longstanding spatial objectives, the Lao government signed on to the Belt and Road Initiative in 2016. However, alignment with the Belt and Road Initiative is not a straightforward affair. Yeh points out that “the crux of the issue is less about ‘weak’ and ‘strong’ states than it is about how Chinese investment may enable a reconfiguration or reinforcement of state power”. [96] While Laos has shown it is not simply a weak state or playground for geopolitical heavyweights, the Belt and Road Initiative precipitated a proliferation of projects that the state was under-prepared to manage. In an initial step to do so, the Lao government restructured–departments, advisory committees, and research groups have been formed or re-oriented. Bureaucracies have been created and re-directed to negotiate and manage projects with Chinese government counterparts and to coordinate different levels of the Lao government. As Ministries focus on how to benefit from the deluge of projects and capital, they have established research desks to answer this question as it relates to the Belt and Road Initiative. Most notably, the Laos–China Committee analyzed and respond to cooperation frameworks related to the Laos–China Railway and the economic corridor that Beijing proposed to follow it. Its primary task is the macro-economic analysis of agriculture, services and tourism, finance, and customs in northern Laos. The Prime Minister’s Office also established a Belt and Road Initiative committee for decisions on costs and negotiation. It determines which Belt and Road Initiative sectors and projects to prioritize. In addition, the Belt and Road Initiative is the starting point of the most recent five-year plan (2021–2025 NSEDP), and they directed national research institutes within the government to conduct Belt and Road Initiative-focused research to inform the plan.

They undertook state restructuring to pursue particular projects. This is the case for the Laos–China Railway (LCR), a flagship Belt and Road Initiative project. Before the LCR, the country had only a few kilometers of railway track that extended from the capital Vientiane to Thailand, which was managed by a small department in the Ministry of Public Works and Transport (MPWT). With the LCR, the Department of Railway under the MPWT was rebranded as the “Laos–Thai Railway Department” and the new “Laos-China Railway Department” was formed to track the LCR’s progress. However, most of the planning, construction, and oversight fall under the Laos–China Railway Company joint venture, established to develop, manage, and operate the project. In addition, the Lao government issued preferential policies that, for example, allow state land use at no additional cost, provide tax exemptions, waive domestic resource charges and import duties, reduce foreign residence fees for workers, and encourage related investments.

In China-US rivalry, Chinese-backed projects undeniably mediated Laos’ current integration into the global economy. However, other regional and western actors influence how the Lao government navigates and undertakes state spatial projects. The Belt and Road Initiative challenges neighboring Thailand and Vietnam, currently the second and third largest investors in Laos, as well as Japanese institutions such as the ADB. Stuart-Fox notes that “[h]istorically the Lao have been adept at balancing one external power off against another, and it is part of their international relations culture to do so”. [97] Indeed, Vietnam and China have historically competed for influence in Laos [98] and within Laos’s ruling party, there has long been speculation of pro-Chinese and pro-Vietnamese factions. Yet the Lao state balances relations between communist neighbors and western-influenced institutions and countries. Before the Belt and Road Initiative, the Ministry of Planning and Investment (MPI) established the Laos–China Department to oversee a large portfolio of projects, e.g., mining, hydropower, and plantation. Today, there are three foreign investment departments in the MPI, Laos–China Cooperation, Laos–Vietnam Cooperation, and International Cooperation. An MPI official explained that this is because “there is just more certainty that we will work closely on extensive projects with China and Vietnam, so these offices allow us to act bilaterally and discuss issues directly if we have challenges”.

While China is the pacesetter, western governments are responding to infrastructure competition. The US launched initiatives in Laos — e.g., Asia EDGE, Infrastructure Transaction and Assistance Network, and Rational Choice—that make up a nascent Belt and Road Initiative counter-strategy. According to a USAID officer in Laos, “[n]o country can compete with China in terms of money for infrastructure,” hence US programs aim to “build [Lao] government capacity to make better decisions and negotiate better terms [with Chinese actors]” (personal communication, March 2019). In the words of USAID Administrator Mark Green: [99]

Whenever you’re dealing with China, there’s great power competition… what we’re trying to do is help countries understand, from a development perspective, if they do choose the authoritarian model … what the fine print is … its unsustainable debt very often. It’s tying up strategic assets. Sometimes, it’s robbing particularly young citizens of their birthright … access to natural resources.

Focusing similarly on “capacity building,” the Australian government proposed the Southeast Asia Economic Governance and Infrastructure Facility in 2019 “to help improve infrastructure decision- making … by building and enhancing government-to-government partnerships” and focusing on planning, procurement, implementation support, policy, and regulations. [100] These and other development actors, such as multilateral development banks, have expressed frustration that Chinese and Vietnamese actors do not attend the Annual Development Roundtable Meetings, yet maintain direct lines with Lao institutions, particularly those managing the Belt and Road Initiative.

Tan predicted that, barring unforeseen events, “the Chinese are on track to achieve the mise en valeur of Laos that the French dreamed of but failed to implement”. [101] As both powerful discourse and material project, the Belt and Road Initiative is driving the latest iteration of state spatial objectives with long histories in Laos. While China is the main protagonist in the current geopolitical-economic moment of infrastructure competition, Vietnam remains an important political-economic ally, like the USA, western governments, and development institutions attempt to respond to the swift implementation of Chinese megaprojects. The Lao state—primarily at the central level—has restructured and the raison d’être for new governmental institutions and agendas is to design and produce an integrated territory. While this has yet to manifest, Lao Prime Minister Sisoulith assured members of the National Assembly that the economy will pick up and indeed grow as connective infrastructures—the railway, a “smart” city, expressways, bridges, industrial farming, and processing facilities—“kick into gear”. [102]

2. Nepal: From “India locked” to land-linked

In October 2019, President Xi Jinping made a historic visit to Nepal. It was the first time a Chinese President visited in 23 years, and he reaffirmed China’s commitments to providing support to build the much-expected Kerung–Kathmandu Trans-Himalayan Railway, several cross-border highways, trans-Himalayan economic corridors, dry ports, the Kathmandu ring road, and a university. He emphasized these projects would integrate the landlocked Himalayan nation with China and beyond and presented a vision of shared prosperity that would transform Nepal. This visit followed visits from India’s Prime Minister Narendra Modi, who in September 2019, along with his Nepali counterpart KP Oli, remotely inaugurated a 69 km cross-border oil pipeline between India and Nepal, the first of its kind in South Asia.

Nepal has negotiated a precarious geographic, political, and economic position, as tensions between China and India have intensified. Indeed, these tensions are a defining feature of the new Cold War in the Nepali Himalayas. By competing with China to integrate Nepali infrastructure networks, India’s interests align with American objectives, most notably its Indo- Pacific Strategy. Although Nepal’s economy has historically depended on India, its future orientation is not a foregone conclusion. Tensions between Nepal and India reached a fever pitch in 2015 when India blockaded Nepal in response to the ratification of its constitution. This led to broad-based resentment towards India from a cross-section of Nepali society. The Belt and Road Initiative alters the political opportunity structure in the Himalayas. A common refrain in Nepal is that the country is “India locked,” and increasing infrastructural integration with China is a spatial strategy designed to challenge India’s long-standing domination and realize a measure of self-determination.

Infrastructure has been deployed by the state as an organizing force since the unification of Nepal in the 18th century. [103] Nepali rulers symbolized divine power through traditional infrastructures such as temples, monasteries, horse cart trails, and statues. After Prime Minister Rana visited Europe in 1850, the emphasis shifted to modern infrastructures such as roads, hydro-management projects, and urban planning. [104] From the 1950s to the 1980s, infrastructure construction was part of a broad strategy of national integration and the improvement of supposedly backward places. A host of modernization schemes “discovered” a “backward” society on the margins of the Himalayas in the 1950s [105], and infrastructure projects were expected to foster modernization [106], such as an east-west highway and several north-south highways prioritized to connect Kathmandu with the southern plains. [107] Large-scale connectivity projects were understood as catalysts for industrial production and prerequisites for social welfare. [108] Institutions and policies realized these spatial objectives, such as the Ministry of Planning and Development (1951), the National Planning Commission (1955), the Regional Transportation Office (1958), and the institutionalization of five-year plans (1956).

Like many low-income countries, Nepal was subject to neo-liberalization in the 1990s, which resulted in the privatization of infrastructure, industries, and services. It is difficult to overstate the significance of this shift–the private sector and multilateral development agencies were tasked with infrastructure development, and the state abandoned spatial objectives. Indian firms were willing buyers of Nepali industries and infrastructure [109], while the improvement of “human development indicators” became the domain of NGOs. [110] Investment in infrastructure declined precipitously, economic productivity decreased, and industrial output declined. Nepal became a de facto Indian satellite and the late 1990s Maoist Revolution erupted as a response. At its core was the demand for a modern Nepal and infrastructure was key to this vision. The Federal Democratic Republic of Nepal was established in 2006, yet after a decade of civil war, Nepali infrastructure was in tatters, and political institutions were fragmented. It was not until 2015 that a new constitution was ratified.

The constitution revived grand state spatial objectives and infrastructure projects were expected to stimulate an economic “revolution.” For many, the constitution signaled a welcome end to decades of sluggish growth, violence, and political instability. It was met with disapproval in Delhi’s corridors of power, however, and from September 2015 to February 2016, India imposed an economic blockade to punish Nepal for promulgating the constitution without its consent. [111] This provoked outrage in Nepal, which unified parties across the political spectrum, within which there was a growing consensus that the cultivation of connectivity with China could reduce dependency on India. [112] In contrast to the oft-repeated narrative that the Belt and Road Initiative fosters subordination to China, the Belt and Road Initiative offered Nepal a readymade spatial framework consistent with its geopolitical objectives. Nepal signed a Memorandum of Understanding with China in 2017 to formally embrace the Belt and Road Initiative. Its infrastructural pivot is outlined in detailed project reports for trans-Himalayan railways, highways, transmission lines, cyber connectivity, and economic corridors. China completed two inland ports in December 2019 and five others are under construction. Many Belt and Road Initiative-related infrastructure projects fall under China and Nepal’s Trans- Himalayan Multi-Dimensional Connectivity Network. During a state visit to India, Chinese Foreign Minister Wang Yi stated: [113]

All walks of life in Nepal believe that strengthening connectivity under the framework of the BRI gives the Nepali side the hope of transforming itself from a landlocked to a land-linked country. The Trans-Himalayan Multi-Dimensional Connectivity Network will tighten the bonds between both countries and help the Nepali side play the role of a bridge in economic development in the region, which will be convenient for both countries and beneficial to the region.

This carefully crafted statement was made in India and emphasises unity within the Nepali polity regarding the country’s relationship with China. However, Nepal’s reorientation towards China is far from certain despite the host of Belt and Road Initiative projects underway. As noted, Nepal is subject to competition, and the Indian and Nepali Prime Ministers jointly inaugurated two inland ports, and a 65 km railway between the Indian border town of Jainagar, Bihar, and Nepal’s foothill town of Bardibas. Although the two countries are locked in an ongoing territorial dispute, [114] India has committed to building five cross-border railway lines, and Nepal is included in its initiative to build roads across much of South Asia (i.e., the South Asia Subregional Economic Cooperation Road Connectivity Investment Program).

Complicating this tug-of-war, the USA recently increased its infrastructural interest in Nepal. American efforts complement India’s objectives and seek to halt Nepal’s orientation towards China. The US Millennium Challenge Corporation (MCC) was created in 2004 to build infrastructure in strategically important developing countries, and it is currently funding a 100- km highway and a high-voltage transmission line to export hydroelectric power from Nepal to India and Bangladesh. This US$500 million initiative serves to integrate South Asia in an India-centric manner. A US official sparked controversy when, during a visit to Nepal, he stated that this initiative was part of the Indo- Pacific Strategy designed to counter Chinese influence. [115] The USA thus works in tandem to compete with China, because besides Indian-financed infrastructure projects, a host of actors contribute to the orientation of Nepal towards India. For example, Japan increased aid to Nepal for tunnels, urban roads, and rural connectivity, and the World Bank and the ADB have loaned millions of dollars for infrastructure, primarily roads and urban development.

To coordinate the geopolitical-economic competition to build infrastructure, the Nepali state has undergone a systematic restructuring. The National Planning Commission and several lines of ministries have historically coordinated large-scale infrastructure projects at the central level. They established a parallel entity called the National Infrastructure Development and Investment Board to serve as an umbrella organization and coordinate central government bureaucracies. This powerful national institution hosts annual infrastructure summits with investors and developers. They have created several new national institutions since 2015, such as the Nepal Infrastructure Development Company to build large-scale infrastructure; the Department of Shipping and Waterways to enhance connectivity with India through Himalayan rivers; the Department of the Railways was revitalized and strengthened to construct lines from China and India; and the Millennium Challenge Account Nepal (MCA- Nepal) was formed under the Ministry of Finance to implement US-supported infrastructure projects. Joint investment cooperation groups have been formed with both China and India, and several laws and regulations have been revised or promulgated to simplify land acquisition, environmental impact assessments, and forest clearance for priority infrastructure projects. Finally, the government established national institutions to implement at least 20 different Belt and Road Initiative-related agreements.

In sum, the Nepali polity has coalesced around state spatial objectives following decades of economic turmoil, civil war, and political gridlock. The state is moving away from an empowerment-based development model led by western NGOs and is refashioning itself as a 21st-century infrastructure state as it mobilizes foreign capital for transnational infrastructure projects. The primary protagonists of this geopolitical-economic competition in Nepal are China and India, while the USA and other countries and multilateral institutions take part by contributing to spatial projects that augment Nepal’s India-centric orientation. In this context, the construction of trans-Himalayan infrastructure represents an assertion of agency closely tied to the objectives of self-determination, sovereignty, and ultimately the realization of national dignity. [116]

Conclusion

This paper first considers the notion of a new Cold War and suggests that there is a novel territorial logic in which the USA and China engage in geopolitical economic competition to integrate territory into respective spheres of orientation. The dynamics of this competition differ from the Cold War, and as the epigraph from Mike Pompeo shows, the US cannot “contain” China. Instead, the USA has competed with China to realize a territorial vision through the financing and construction of large-scale infrastructure. But this competition is not straightforward or zero-sum. Illustrative of this point, the RAND Corporation recently released a board game entitled Hedgemony: A Game of Strategic Choices for the training of American defense professionals. [117] In the game, the USA, NATO, and the EU square off against China, Russia, North Korea, and Iran, but “force deployment” is not geared towards gaining direct control over territory. Instead, the game’s “single victory metric” is gaining influence. [118] This game expects an emergent American strategy to counter China that differs significantly from its efforts to contain the USSR. American efforts have been piecemeal [119], yet the election of Joe Biden may herald a coordinated American-led multilateral effort to limit China’s influence.

Biden proposed a multilateral response to the Belt and Road Initiative in conversations with British Prime Minister Boris Johnson and Japanese Prime Minister Yoshihide Suga. [120] He also unveiled a far-reaching plan to invest in aging American infrastructure and certain key industrial sectors designed to “position the United States to out-compete China.” [121] Perhaps more significant is America LEADS Act, [122] which was introduced in Congress by Democratic Senators. It is the foreign policy counterpart to Biden’s domestic infrastructure plan, and it proposes a coherent whole-of-government strategy to compete with China in a range of sectors and regions. If signed into law, it would mobilize the US Government “[t]o recognize and respond to the differences between the United States and the People’s Republic of China and the geopolitical, strategic, economic, technological, and normative challenge that the Government of China, under President Xi Jinping’s leadership, poses to the United States and the global community”. Importantly, the law would allow the appropriation of “such sums as may be necessary to co-finance infrastructure projects that could otherwise be included within China’s Belt and Road Initiative”.

The week before Americans went to the 2020 presidential election polls, leaders of the Chinese Communist Party passed the 14th five-year plan, prioritizing research and development in key sectors and the continued internationalization of Sino-centric supply chains. The introduction of a “new style [of] international cooperation” will underpin these policy goals that will supposedly foster win-win outcomes. [123] Xi Jinping directed his World Economic Forum remarks at Joe Biden and warned against a new Cold War. [124] In their first meeting with Biden Administration officials, Chinese diplomats clarified they reject an American-led, rules-based international order. [125] This raised eyebrows in the EU, and in a move that undermined a much-anticipated trade deal, China imposed sanctions on several European politicians. [126] Finally, Chinese diplomats rubbed elbows with allies to shore up support. Most notably, they signed a 25-year strategic partnership with Iran. [127] While the world cannot be neatly divided into two competing blocs, both the USA and China are steeling themselves for a long-term rivalry.

This context of geopolitical-economic competition—besides the “rise of China” — requires attention and may allow smaller states to advance longstanding spatial objectives. However, sometimes, pursuing these spatial objectives causes “state restructuring”. [128] In Laos and Nepal, state restructuring has led to the emergence of the 21st-century infrastructure state, whose legitimacy we partly based on its ability to mobilize foreign loans and grants for transnational infrastructure projects while maintaining autonomy. This speaks to a geography scholarship focused on the response of states to global events and the manifestation of these responses in space. If states can achieve longstanding spatial objectives in the new Cold War, the territory may not be oriented towards either China or the USA and its partners, and instead, it looks more like an elaborate patchwork of transnational connections. Future research should interrogate these emergent geographies of a new Cold War and undertake multi-scalar inquiries that are both grounded and transcend state boundaries.

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[73] Id., 4.

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.