DISPATCHES OF THE SECOND COLD WAR OBSERVATORY
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SWINGING NODES: STATE-CAPITAL HYBRIDITY AND NETWORK POWER IN US-CHINA RIVALRY
Fawwaz AL-ABDULHADI
17 August 2026

Beyond alignment and hedging

In May 2025, at Singapore's Shangri-La Dialogue, Asia's premier defense summit, French President Emmanuel Macron urged Europe and Asia against becoming collateral victims of the imbalances linked to the choices made by superpowers; he challenged what he called ‘revisionist countries that want to impose—under the name of spheres of influence—spheres of coercion,’ from ‘the fringes of Europe to the archipelagos in the South China Sea’ (Pajon, 2025). That this annual conference takes place in Singapore is no accident. The city-state of 6 million with negligible military power has become indispensable to managing US-China rivalry precisely because it refuses to be pulled into ‘spheres of coercion’. Macron’s admission signalled that bloc formation logic can no longer be binary, hence opening space for middle powers to occupy. 

Singapore, however, has institutionalised this principle through its sovereign wealth fund. While others resist coercion through diplomacy, Singapore does so through market indispensability. In 2025, GIC and Temasek combined deployed $31 billion across global markets, while Saudi Arabia's Public Investment Fund led global sovereign spending with $36.2 billion, including its acquisition of Electronic Arts (Gupta, 2026), simultaneously maintaining massive positions in US tech giants and Chinese platforms. Saudi Arabia's Public Investment Fund became the world's most active sovereign investor in 2023 (Shan, 2024), pumping billions into American AI companies while partnering with China on Belt and Road infrastructure.

Amid US-China rivalry, some firms 'align' with one great power to secure state patronage, while others ‘hedge’ by maintaining precarious ties to both (Schindler and Rolf 2024). Finally, some multinational corporations take positions in state-capital hybrids whose sovereign ownership wraps the investment in political classification while underlying commercial substance crosses blocs. State-capital hybridity is what enables this mechanism (Alami and Dixon, 2020). Sovereign ownership combined with market operations produces a position that pure private firms nor pure state actors can replicate. These positions can be described as ‘swinging nodes’. Such positions sustain commercial engagement on both sides of the rivalry through the same institutional vehicle. The swing is an arc that spans both ends, a portfolio position rather than a temporal motion. The vignettes below demonstrate how firms can take this third route through PIF and through Singapore’s dual architecture; this is power through position, not possession, something traditional international relations theory struggles to explain.

The Public Investment Fund

The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, manages approximately $925 billion (Azhari and Choukeir, 2026). HUMAIN, a wholly owned PIF subsidiary launched in May 2025, signed a partnership with NVIDIA projecting a capacity of up to 500 megawatts powered by several hundred thousand advanced GPUs over the next five years (NVIDIA, 2025; Whelan and Vipers, 2025). Conversely, in May 2024, Lenovo finalised a $2 billion strategic partnership with Alat–a company fully owned by the PIF–consisting of zero-coupon convertible bonds (Choukeir, 2024). This showcases PIF’s portfolio, both US- and China-facing commercial substances: a container that holds both poles. The distinctive feature is the PIF-listed vehicles, which open a new avenue for organisations to bypass the polarisation of the US-China rivalry via state-capital hybridity. ACWA Power, PIF-controlled and Tadawul-listed, operates across the GCC, Central Asia, and Southeast Asia with deep partnerships across both US-aligned financing and Chinese clean energy firms (Sungrow, MingYang, PowerChina), combining sovereign ownership with cross-bloc commercial substance (Calabrese, 2025). PIF, through its subsidiaries, offers an alternative route to bypass US-China rivalry. As a sovereign container, it offers third-party investors entry into markets whose direct engagement would carry political costs. Firm-level diversification cannot reproduce this sovereign wrapper, since sovereign ownership combined with market operation produces a position that private corporate arrangements cannot replicate.

GIC and Temasek

Singapore demonstrates the swinging mechanism through dual architecture. GIC, which manages an estimated $800.8 billion in assets, is a sovereign wealth fund that manages foreign reserves through diversified (Kok and Ngui, 2025), long-term global investments, while Temasek, with a net portfolio of approximately $338.35 billion, is a state-owned investment company that acts as an active commercial shareholder with an equity-focused portfolio (Ngui, 2025). In February 2026, GIC led Anthropic’s $30 billion Series G at a $380 billion post-money valuation, extending its earlier Series F position alongside QIA and MGX (GIC, 2026). Three middle-power sovereign wealth funds jointly anchoring the largest AI funding round on record signals that the swinging node position is increasingly co-constituted across hybrid actors, rather than occupied by any single institution.

The handhold, however, lies in DBS Bank. Temasek-controlled and SGX-listed, DBS runs corporate and institutional banking across US and Chinese markets. DBS’s cross-border wealth management channels flow through Singapore and Hong Kong, serving clients with exposure to both US and Chinese assets. Third-party investors taking positions in DBS acquire equity registered as Singapore sovereign-linked while inheriting cross-bloc commercial exposure through the bank's operations. DBS partnerships with Tencent and Ant International integrate its payment infrastructure with the Alipay+ and WeChat networks, while its corporate and wealth banking operations span the US and Asian markets simultaneously (DBS Bank, 2026). The Singapore dual architecture and the Saudi consolidated architecture produce the same sovereign wrapper through different institutional forms, suggesting the mechanism is not tied to any single configuration.  

Reframing Middle-Power Agency

What does this institutional route imply for how we read middle-power agency in the Second Cold War? Sovereign wealth funds serve as more than a primary vehicle for state capital accumulation. Through state-capital hybridity, SWFs and their subsidiaries leverage sovereign classification to access rival blocs. In turn, third-party firms are cloaked under the sovereign vehicle and access territories that would otherwise bear political costs (Schindler and Rolf, 2024). The implication of swinging nodes warrants a renewed assessment of middle-power agency. Middle-power agency no longer centres on diplomatic posture, but on institutional infrastructure that reroutes the binary itself. Thus, while some scholars have interpreted the refusal of many world leaders to choose between the US and China as evidence of new non-alignment, the fact is that middle powers are already structurally interdependent—or ‘polyaligned’—with the US and China (DiCarlo et al., 2026).

Macron’s refusal to become a ‘collateral victim’ of superpower imbalance does not propose an instrument, but a posture. The vignettes above show that the instrument already exists, but it is not captured in diplomatic discourse. PIF, GIC, and Temasek do not protest the binary, but they provide an alternative that routes through it. The analytical payoff is twofold. First, state-capital hybridity (Alami and Dixon, 2020) generates a position that neither private firms nor classical state actors can replicate, because sovereign classification and market operations are fused within the same vehicle. Schindler and Rolf’s (2024) align-or-hedge typology captures firm-level responses to the rivalry. However, the third route takes the form of a hybrid in which the sovereign wrapper holds cross-bloc commercial substance under one institutional roof. Second, the swing is a portfolio rather than a pendulum. It is not an oscillation between the poles, and the wrapper is what permits the simultaneity. This reframes middle-power agency in the Second Cold War. Singapore's indispensability and Saudi Arabia's centrality do not derive from military weight or diplomatic finesse alone. They derive from institutional infrastructure that reroutes the binary at the level of capital allocation. The space for middle powers to occupy that Macron’s speech opened discursively has, in these cases, already been occupied structurally. Whether third-party firms exploit this institutional route systematically, and through which listed vehicles, remains an open empirical question. Shareholder registers of PIF-controlled and Singapore sovereign-linked listed entities offer one starting point. What remains for IPE is to specify the conditions under which swinging nodes hold, and the conditions under which Washington or Beijing forces the wrapper to choose.

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Fawwaz Alabdulhadi is a PhD Student in the School of History, Anthropology, Philosophy and Politics at Queen’s University Belfast. His dissertation examines how Gulf rentier states deploy small and medium-sized enterprises (SMEs) as instruments of state-led economic restructuring, focusing on Qatar, Saudi Arabia, and Kuwait.

The opinions expressed herein are those of the authors; they do not necessarily reflect the views of the SCWO.

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