China’s LOGINK Logistics Platform and Its Strategic Potential for Economic, Political, and Military Power Projection

“Beijing wants to carry, store, and mine more of the world’s data while keeping its own networks out of reach.”

— Jonathan Hillman, The Digital Silk Road

Even as China integrates into the global economy, Beijing is seeking to minimize its foreign dependencies while making other countries more dependent on China. Logistics data management is an area where China already approaches global leadership status, and Beijing may be on the cusp of creating a new and highly valuable asymmetric dependency that it could exploit for strategic gain.[1]

LOGINK’s Capabilities

China’s state-supported National Public Information Platform for Transportation and Logistics (LOGINK) is a logistics management platform that aggregates logistics data from various sources — including domestic and foreign overseas ports, foreign logistics networks, hundreds of thousands of users in the People’s Republic of China (PRC), and other public databases — to provide the most comprehensive picture available of the world’s logistics activities. It complements PRC firms’ commanding position in the global merchant marine, as beneficial owners of slightly over 18% of global tonnage in 2022.[2]

LOGINK offers Beijing a means to monitor and shape the international logistics market, increase foreign strategic dependency on China, and exploit the vulnerabilities of LOGINK users for economic and geostrategic purposes. Within the logistics market, LOGINK helps consolidate Beijing’s influence over the global maritime transport system, which moves an estimated 90% of the global goods trade.[3] Beijing can quietly feed insights from LOGINK to preferred PRC logistics firms at preferential prices, a key competitive advantage in a third-party logistics market that a recent study by the U.S.-China Security and Economic Review Commission estimates to be worth $1 trillion annually.[4] Giving PRC firms such an information edge would help them to systematically underbid foreign competitors and would drive even more data flow over LOGINK at the expense of other systems, further cementing Beijing’s informational advantage.

LOGINK also increases foreign dependency on China. Foreign logistics firms, ports, and other users dependent on LOGINK may be incentivized to conform to Beijing’s wishes or lobby for PRC interests. Finally, Beijing can wield this new dependency to advance its political, economic, and military aims. Beijing could selectively restrict foreign access to LOGINK to punish or coerce foreign users or governments or use the system’s detailed datasets to implement logistics-oriented sanctions. During times of conflict, LOGINK could be used for strategic and tactical warning — for instance, being able to monitor U.S. and allied military logistics movements — or Beijing could even weaponize the logistics data by sharing it with America’s adversaries or by enabling the People’s Liberation Army (PLA) to interdict allied logistics in wartime.

LOGINK’s Leading Role in Global Logistics Management and Tracking

LOGINK began in 2007 as a provincial-level truck and logistics tracking system in Zhejiang and by 2009 was expanding to all Chinese provinces, a process that unfolded alongside efforts to establish a unified document submission portal.[5] In 2010, LOGINK began to incorporate data from the Northeast Asia Logistics Information Service Network (NEAL-NET), which initially covered container ship operations in the ports of Ningbo-Zhoushan (PRC), Tokyo-Yokohama (Japan), and Busan (South Korea). Six years later, the network included 11 Chinese ports, five Japanese ports, and three South Korean ports.[6] 

Fast forward to today, and LOGINK has become a world-scale information and intelligence funnel aggregating data from more than 450,000 users in China, 5 million trucks, multiple public databases in China, more than 200 Cainiao[7] logistics warehouses worldwide, CargoSmart (which live tracks more than 90% of global container ships), Chinese domestic ports, and up to two dozen foreign ports.[8]

Access to foreign port community systems amplifies LOGINK’s data haul. LOGINK’s cooperation agreements and partnerships include PortBase (Netherlands), Maqta (UAE), and Network of Trusted Networks data from the International Port Community Systems Association (IPCSA), whose members include tens of ports worldwide.[9] Port community systems offer a critical entry point because once LOGINK is plugged into their data streams, PRC firms will not even necessarily need a physical presence at a given point in the supply chain to achieve significant data visibility and insights into cargo flows. With such expansive tentacles, LOGINK provides the most comprehensive picture available of national — and increasingly, global — logistics activities and, according to one analyst, is a decade ahead of rival information systems.[10]

While not all PRC-invested overseas ports are explicitly named as LOGINK participant facilities, the presence of PRC-based owners and port operators creates strong incentives and opportunities for LOGINK to be used at these ports. PRC-based investors and port operators have a substantial overseas footprint. Research by Isaac Kardon indicates a PRC presence in at least 95 overseas ports, with central state-owned enterprises (SOEs) — key LOGINK participants — owning stakes in and/or operating 52 ports abroad, private Chinese firms owning stakes in or operating a further 35 ports, and local SOEs involved in an additional eight ports.[11]

Along with its view of port operations, LOGINK has unrivaled visibility into global shipping container flows. For starters, it can leverage its homebase in China, which by 2009 already accounted for 23% of global container flows. By 2020, growth in China’s own container volumes plus the LOGINK network’s international expansion had positioned it to potentially have contact with at least half of the global container flows that year (Figure 1).[12] Note that the graphic portrayal in Figure 1 may underestimate LOGINK’s reach, given PRC firms’ extensive overseas logistics operations and their management and ownership roles in foreign ports, described above.

 

Figure 1 — LOGINK Timeline and Estimate of Covered Container Volumes (TEU/yr)[13]

 

Figure 2 — LOGINK Organizational Structure (based on LOGINK’s own self-portrayal)

 

 

The LOGINK platform itself appears to be fundamentally led and shaped by China’s Ministry of Transportation (Figure 2), which is steadfastly working to expand LOGINK’s international coverage.[14] This ministry has spearheaded efforts to shape international standards development to better align the platform’s messaging and data formats with those used by pre-existing and emerging globally utilized transport systems.[15] Data flows into and through LOGINK along at least three publicly acknowledged vectors: business-to-business (B2B), business-to-government (B2G), and government-to-business (G2B) (Figure 3).[16] At least one public document portrays bilateral dataflow from government systems into the LOGINK platform, which strongly suggests a fourth flow path — government-to-government (G2G) within China.[17] This final path would likely involve internal security agencies, and as far as we can ascertain, LOGINK does not discuss it publicly.

 

Figure 3 — LOGINK Information Flow Architecture, Circa 2018

 

 

Figure 4 — LOGINK’s Proposed “Data Sharing Model”

 

 

Expanding the Reach of LOGINK

Looking ahead, LOGINK seeks to expand its reach far beyond ports and maritime trade by integrating into the nodes, platforms, and networks of international air, rail, and road logistics transport systems (Figure 4).[18] Although LOGINK’s international expansion into these other logistics methods is currently in the early stages, the following three examples — airports, ground vehicles, and existing regional logistics networks — offer an idea of how LOGINK’s integration into multimodal logistics networks could unfold.

Airports. Airports outside China, especially those built by Chinese firms and wired with PRC-origin IT hardware and systems would offer a rich array of useful information. Huawei’s Smart Airport architecture offers some sense of the potential data streams that could be collected and voluntarily (or compulsorily) fed into LOGINK. Smart Airport promotes a cloud-based management system that collects and utilizes data on aircraft movements and ground location, facial identification and other biometric data from passengers and people on the premises, and tracking of objects and vehicles on the airport grounds.[19] A terminal whose IT hardware originated from Huawei would also likely include the ability to capture reams of telecommunications data, including IMSI and IMEI numbers[20] of individual phones, network traffic, and other parameters.

PRC-origin Vehicles. PRC-origin ground vehicles — internal combustion and electric alike — tens of thousands of which are now being exported each month, could also become data collectors for LOGINK. Electric vehicles have received the most attention in this regard. The Chinese government itself decided in early 2021 to restrict the use of Tesla vehicles by military staff and employees of certain state-owned enterprises, suggesting it recognizes the potential intelligence value of EVs, which are festooned with cameras and sensors that regularly share a substantial stream of data with the vehicle manufacturer.[21] Revelations that Tesla employees shared videos and images recorded by customers’ car cameras over a period of at least three years confirms the potential for abuse.[22] If rogue employees in the United States can access such sensor data, it stands to reason that employees of PRC-based car firms could access and — under the country’s National Intelligence Law — might be forced to access such data, without customers ever being notified. Internal combustion vehicles can also be equipped with the same sensor suites as their electric cousins — for instance, GM’s OnStar safety and tracking system has been available as an option on the company’s cars and trucks for 25 years.[23]

Data Sharing with Existing Networks. Finally, data sharing arrangements with existing regional and local logistics networks — similar to the relationships LOGINK has with IPSCA and NEAL-NET — would likely confer data access to a much broader network of ports and logistical assets, even those which are not named LOGINK participants. Becoming a trusted party in existing logistics networks can help LOGINK penetrate or maintain presence in those markets where even Chinese-origin technical hardware is formally restricted or has been removed. Policymakers seeking to reduce China’s reach through logistical and data networks will have to consider the possibility of such “one layer removed” LOGINK data access.

LOGINK is a Vehicle for Monitoring and Shaping International Markets

LOGINK is far more than a passive aggregation vehicle; it is a potential tool for the PRC to stake a globally dominant position in monitoring trade flows and controlling markets. Governments in most of China’s key trading partners generally have an arms-length relationship with commercial firms domiciled in their jurisdictions, regulating and taxing them, but not having direct input on commercial decisions and actions. The PRC, in contrast, operates under a “whole of government, all the time” system, which Treston Wheat aptly describes as “a state in disguise of a merchant.”[24]

The largest shipping firms participating in LOGINK — including China Merchants Group and China Ocean Shipping — are parastatal firms, in which the Chinese government owns controlling shares and for whom executive appointments hinge far more on political concerns than commercial imperatives. Even for smaller and ostensibly private entities, none can escape the Chinese Communist Party’s (CCP) grasp. A 2018 survey by the All-China Federation of Industry and Commerce found that depending on the region, between 31% and nearly 60% of companies operating in China had party cells.[25] With or without CCP cells, PRC firms are universally subject to Article 7 of the 2017 PRC National Intelligence Law, which states in relevant part that “Any organization or citizen shall support, assist, and cooperate with state intelligence work in accordance with the law, and maintain the secrecy of all knowledge of state intelligence work.”[26] A PRC state-corporate architecture comprehensively mobilized for competition with foreign entities should be expected by default to weaponize information advantages and use friction to disadvantage non-PRC entities.

PRC officials stated as early as 2017 that LOGINK offers opportunities “for the government to shape markets in the Internet era.”[27] One way LOGINK seeks to accomplish this aim is by international standards setting.[28] At the local level, China’s existing scale in global markets means that standardization, which streamlines transactions and reduces costs, can help cement customer relationships for Chinese firms facing greater foreign competition, especially in markets with thin margins. On a global macro level, setting the standards in the emerging intelligent logistics space potentially yields spillover benefits in adjacent businesses, including higher-technology applications such as smart sensors, satellite positioning systems, and planning/optimization software.[29]

Taking a commanding-heights-sized data pool[30] and refining it into high value-added services and insights can also position LOGINK to capture more market share and shape multiple markets in China’s favor. As Chinese data laws increasingly restrict foreign entities’ access to information from China, PRC-based systems like LOGINK provide Beijing with a considerable advantage. LOGINK is poised to continue collecting and aggregating data streams from abroad, which can then be fused with information collected in a non-reciprocal, privileged fashion in China’s massive domestic market.[31] Left unchecked, this dynamic enhances LOGINK’s attractiveness to foreign participants who may come to see its class-leading data corpus as their “window into China” — a sales point already used by LOGINK.[32]

LOGINK’s Ambitious Plans for Future Services

A 2015 presentation by the director of the Chinese Ministry of Transportation’s Transport and Logistics Research Center of Research Institute of Highway revealed LOGINK’s intention to deliver cloud-based business process as a service (BPaaS) capabilities.[33] While LOGINK has characterized its ambition as a “BpaaS” proposition, simple business processing outsourcing alone is likely a first step on the path toward becoming something more akin to a combination of “platform as a service” (PaaS) with big-data analytics — imagine a combination of Amazon Web Services (platform infrastructure) and Palantir (big data analytics). Each is powerful on a standalone basis, but once bundled, the integrated whole and its market impact substantially exceeds that of the sum of its component parts — particularly if the platform has master access to customer data and flows.

LOGINK’s market power in the logistics platform space should be taken seriously for several reasons.

Monopoly Position. LOGINK has a monopoly position in an economy that accounts for nearly 20% of global GDP and an even larger share of global manufacturing.[34] If LOGINK can leverage this giant “anchor” market and use its data to extract insights about goods flows, timing, and pricing at a commercially competitive pace and level, the network would become more attractive and potentially yield a self-fulfilling attractiveness as it displaces competitors without its scale, state sponsorship, and massive data stockpile. In a world where machine learning and AI increasingly confer important competitive advantages, data is a key vector of power. As Kai-Fu Lee, the former head of Google China, noted in 2018, “A very good scientist with a ton of data will beat a super scientist with a modest amount of data.”[35]

Technical Capacity. Alibaba’s involvement with LOGINK suggests the technical capacity to execute on the platform’s business services and big data processing ambitions either already exists or can plausibly be built. Year after year, Alibaba successfully manages China’s Singles Day — the world’s biggest annual online shopping event — with self-developed commerce-focused cloud native[36] software systems that are also used by governmental entities, including China Post.[37]

Insulation From Normal Commercial Pressures. LOGINK’s direct relationship with the Chinese state insulates it from normal commercial pressures. In a world where global connectivity remains vital but information flows are increasingly crimped and siloed by political forces, platforms that can focus on capturing customers and offer low or no direct cost services during periods of economic turmoil can entrench disproportionate commercial and strategic advantages. The most straightforward example would be LOGINK’s ability to undercut the pricing of competing logistics platforms and perhaps even offer services for free in exchange for data captured — a business model deployed at global scale by multiple social media platforms. Officials in Beijing almost certainly recognize this reality.

LOGINK Creates Strategic-level Foreign Dependence on China

The PRC could employ LOGINK to the strategic detriment of countries that support a free and open global order. In a world increasingly dominated by an Internet of Things[38] coupled with scalable cloud architecture, a data platform that achieves critical mass first enjoys accretive network effects, can become the standard setter, and, due to the conjunction of the prior two scale-boosters, can become that ecosystem’s dominant organism. This in turn raises barriers to entry for competitors, reinforces the dominant network’s position, and sets the stage for the PRC government, if it chooses, to purposely use LOGINK as a loss-leader for acquiring data. Beijing could get shippers worldwide hooked on the platform’s upfront cheapness and standardized ease of use, extracting insights from users’ decisions and ploughing those back into PRC-domiciled entities whose economic rents then spin back into the PRC economy. This nightmare of network lock-in and data mercantilism is not yet a reality, but it may be in the not-too-distant future.

Preferred Access to Data Gives a Competitive Edge. Preferred access to data would enable PRC logistics firms to maintain a subtle but decisive competitive edge, and the favoritism process could be carried out in an opaque manner that would be difficult to prove. Thus, Chinese logistics firms may be able to expand their market share and drive foreign competitors out of business, increasing global dependency on Chinese logistics services. Moreover, selective use of data as a commercial lever would not just apply in situations where PRC firms were competing with foreign ones. The CCP could also use data access as a carrot and stick to ensure political loyalty among PRC-domiciled firms.

Data Dependency Drives Behavior. Data dependency could even be used to induce foreign LOGINK users to lobby for PRC interests, as well as to punish foreign firms for positions on Taiwan, human rights, and other issues of concern to Beijing.[39] For example, consider the 2018 episode in which the Civil Aviation Administration of China demanded that foreign airlines show Taiwan as a part of the PRC.[40] Firms were threatened that the PRC government would “make a record of your company’s serious dishonesty and take disciplinary actions;” this act of coercion was conducted under a Chinese pilot program of Civil Aviation Industry Credit Measures.[41] If LOGINK becomes more pervasive and is combined with the increasing presence of PRC parastatals at key port facilities around the world, non-PRC shippers and foreign governments will have a harder time resisting the network’s gravitational influence and its ability to confer potent in-kind subsidies to favored participants.

LOGINK as an Aid to Economic Coercion. LOGINK could also turbocharge China’s growing use of economic coercion and sanctions. Policymakers in Beijing have deep experience in using geoeconomic coercion to target vulnerable constituencies in countries whose policy positions China seeks to alter.[42] As Chinese economic warfare policy evolves to include sanctions on persons and entities in a way reminiscent of longstanding U.S. practices, the insights afforded by LOGINK could prove pivotal.[43]

U.S. economic warfare efforts feature intensive investigative work to navigate the widespread use of shell companies and other obscuring mechanisms used by targeted parties in Iran, North Korea, Russia, Syria, and other places. For Beijing, data from a globe-spanning, high-market contact logistics platform like LOGINK — capable of fusing bills of lading, financial data, corporate registry information, and other data streams — could dramatically ease the process of identifying target entities and interdicting their operations. As LOGINK expands, the platform may enable PRC officials to conduct a new type of targeted logistics-oriented economic warfare. Consider, for instance, measures to delay or otherwise obstruct shipments of goods by targeted entities, perhaps under the pretext of some type of broader port problem or other obstructor independent from LOGINK as an entity (to preserve deniability and protect LOGINK’s reputation among the broader user community).

Further, LOGINK could decrease the strategic leverage of U.S. and allied geoeconomic statecraft. Beijing could use LOGINK to manipulate, corrupt, or obscure trade information that the U.S. and its allies might require to identify sanctions targets and enforce punitive measures. If the platform achieves sufficient scale, such manipulation could potentially be done in ways that are subtle, hard to detect, and which could be blamed on shortcomings of a specific user, as opposed to being the result of action by LOGINK itself.

Examples of LOGINK’s Potential Exploitation Pathways

The scenarios below involve informed forward-looking speculation, rooted in comparative examples from the contemporary technology and commerce worlds. Regardless of whether Beijing currently intends to exploit LOGINK in the ways below, the platform’s mere existence unquestionably opens up such exploitation pathways, which may then incentivize their use by Chinese policymakers.

Favoring PRC Logistics Firms through Data Mercantilism

Controlling network nodes where physical and digital commerce meet would confer substantial power to reshape commercial activities in ways that advance PRC national interests. Within China’s borders, LOGINK could provide useful insights for Beijing’s economic technocrats as they formulate and tweak policies. Beyond the PRC’s frontiers, LOGINK offers Beijing an information advantage over foreign entities throughout the supply chain, likely providing one-of-a-kind insight on suppliers, buyers, prices, timing, routing, and vessel information. Such intelligence would be highly valuable — witness the multi-billion-dollar stock market valuations accorded to data repository and processing firms like Bloomberg, IHS Markit, and Palantir.

Unlike the aggregated data generally available through commercial data brokers, what Beijing can likely access through LOGINK could prove an order of magnitude more valuable because it is granular, geolocatable, attributable, and comes with much of the inferential value-add already baked in.

For example, data on a shipment’s seller, buyer, contents, weight, value, and shipping route offers a pre-peeled onion of commercial insight — especially if its authenticity is established through a blockchain bill of lading system such as the one Alibaba is developing with LOGINK and IPSCA.[44] The value of such information is substantial both to competitors of the target firm (micro level) as well as to political leaders. Micro-level data, once aggregated and analyzed, can be used to inform trade and industrial policy actions, taxation policies, and infrastructure investment decisions both within and outside of PRC borders. Such datasets could be commercially sold, used as proprietary guidance for state policy, or both.

Moreover, LOGINK will almost certainly give the platform operators “master level visibility” of party identities and transaction data flowing over the network. At least one Ministry of Transportation expert has discussed encryption of customer identities but without accompanying mention of encrypting the data itself. The strategic importance of logistics data suggests that the data will be encrypted against all but specific parties transacting with each other, but in ways that preserve a skeleton key for the PRC government. As scholars Adam Segal and Lorand Laskai put it in a 2021 analysis, “the Chinese government is working to protect users against cyber criminals, [but] individuals and businesses can have no expectation of the security of their data against the state.”[45]

Insight from primary data and abundant metadata could translate into advantage on multiple levels. Beijing could exploit data obtained through LOGINK in a variety of scenarios, such as by helping Chinese companies systematically underprice foreign competitors; enabling the conduct of market manipulating behavior to advantage Chinese companies and Beijing’s geostrategic goals; and obscuring or manipulating the logistics information available to foreigners to limit their awareness of market activity.

One instructive example comes from a large global e-commerce company’s alleged past use of proprietary data on third-party goods sold on its platform to make similar private label items that then competed with the outside goods.[46] Once the imitation operation was underway, the company began allocating more prime placements to its private label products.[47] Marketing experts noted the positional advantage conferred, with one saying, “The difference between being in slot one versus slot 10, even on the first page, is going to be an order of magnitude different in terms of sales. It is an exponentially decreasing curve. It is a huge drop off.”[48]

Using LOGINK to favor PRC logistics services firms would be a different operation in the sense that pricing and other commercially sensitive information, rather than a tangible product, would be the item abused. And affected entities would have little recourse given LOGINK’s ability to quietly feed proprietary data to favored PRC firms while leaving little to no evidentiary trail discoverable by non-PRC competitors, who might suspect malfeasance but could not prove it.

If the controllers of LOGINK place PRC logistics firms front and center as the default option for logistics services, or even just introduce slight frictional barriers to the use of non-PRC entities, shippers are more likely than not to choose PRC firms. As these Chinese firms gain market share and generate additional data insights into customers, they can then leverage their informational advantage to further improve their market position. Indirect intervention for state interests may only appear to external observers as simple commercial advantage — and can be represented as such by LOGINK to obscure the PRC-controlled data and physical services straitjacket consumers have become trapped in.

PRC use of LOGINK to unfairly advantage domestic logistics firms would pose an intensified challenge because non-PRC competitors —

1. are forced to focus on profits today over national interests tomorrow,
2. compete with each other on a profit and loss basis regardless of domicile, and
3. hail from a small subset of the total slate of countries LOGINK seeks to capture market share in.

Ample pre-conditions thus exist for a relatively unified PRC commercial approach empowered by access to LOGINK data and insights to pursue “divide-and-conquer” campaigns against foreign firms. Viewed on at the transaction level, these market acquisition activities often appear “commercial,” but in fact are state-facilitated and over the medium-term, place non-PRC interests in a seriously compromised position.

Eroding Foreign Customs Sovereignty and Trade Policy

Allowing LOGINK into a country’s ports is akin to turning over senior management of the national customs house to the Chinese government and would open the door to loss of sovereignty over key aspects of trade policy. Unlike 20th century episodes such as the U.S. seizure of the Veracruz Customs House, the affront to sovereignty in a 21st century LOGINK-facilitated scenario could be far more subtle and harder to combat.[49]

Consider, for instance, the potential for manipulation of invoicing, bills of lading, and/or destination data to allow reclassification of goods under tariff. U.S. policy currently imposes significant tariffs upon approximately $335 billion[50] worth of annual trade from the PRC, meaning that even the ability to make relatively small changes (perhaps on the basis of “helping” politically-favored PRC firms while undermining U.S. trade policy) could yield substantial economic or geopolitical impacts over time. Similarly, slight data and metadata modifications could facilitate partial or total tariff evasion, with potentially significant impacts on industrial policies designed to support production of items of high strategic priority, such as solar panels and military equipment.[51] Most of these data obfuscation and falsification operations can be conducted within the current trade information and bill of lading architecture. But when those key information arteries are LOGINK-operated, detecting nefarious PRC attempts to erode third countries’ trade policy sovereignty would be far more difficult, thus tilting the risk/reward balance of manipulation operations in Beijing’s favor.

In a darker case, Beijing could create informational smokescreens or withhold data in ways that enable smuggling of weapons components by fellow autocracies, conceal shipments of illicit substances like fentanyl and its precursors that eventually reach the United States, or facilitate malign activities by organized crime groups that function as deniable proxies for PRC state interests.[52]

Monitoring Adversaries’ Military Logistics While Enabling and Concealing PRC Military Operations

A key lesson of Operation Iraqi Freedom in 2003 and the subsequent fighting was the importance of civilian logistics to military operations. Immediately following the invasion, the Department of Defense Deputy Undersecretary for Logistics and Materiel Readiness and one of her deputies estimated that 85% of sustainment matériel moved into theater was transported by civilian assets.[53] The officials further noted that the coalition used RFID tags and other information streams to create a “common operating picture, which allowed the coalition to achieve real-time information dominance — in both combat and logistics management.”[54] LOGINK could plausibly create a situation in which, unknown to U.S. military logisticians, Chinese entities could see U.S. military logistics movements and get inside the American logistical observe-orient-decide-act (OODA) loop.

Such visibility into cargo flows and the LOGINK system’s accompanying analytical capacity could give Chinese leaders reliable early warning signals concerning U.S. military posture and preparations in peacetime and wartime. In the case of a U.S.-supported proxy war, PRC entities empowered by LOGINK insights could potentially even interfere with military goods shipments or provide targeting information to their client states.

For a contemporary example, imagine the impacts if PRC actors were to hold up shipments of materiél to Ukraine or even potentially to share the information with Russian agents who could then interdict goods en route? Such intelligence sharing would be plausibly deniable yet very damaging to allied interests and commensurately beneficial to the PRC. Lest the scenario sound overwrought, consider that in 2016, Hong Kong authorities (almost certainly working under Beijing’s orders) seized a shipment of 12 containers carrying Singaporean armored vehicles and equipment that were headed back to Singapore after a drill on Taiwan.[55] The Hong Kong incident illustrates the importance of commercial ships and ports to many kinds of military logistics movements. It also highlights that in the event of rising tensions or even war, LOGINK would help the PRC contest allied logistical support from the factory floor to the frontline — a challenge the United States has never faced before.

On the other side of the coin, LOGINK’s dominance of global and regional logistics flows could help the PRC to conduct and conceal its own logistics preparations for regional or global military operations in peacetime and wartime. As the PLA increasingly operates globally, LOGINK could provide the PLA a secure means to monitor the overseas logistics environment and coordinate the sustainment of Chinese overseas bases and units. In addition, although certain types of logistics operations may be hard to conceal, the PLA’s reliance on civilian logistics infrastructure and shipping could be obscured via manipulation of dataflows in LOGINK.  Mis-direction operations facilitated by dominance of key logistical data platforms could even play an integral role in helping the PRC prepare the battlespace in advance of PLA military operations.

U.S. Policymakers Must Focus Strategically on PRC-Controlled Internet-Connected Information Systems

LOGINK offers a broader lesson for policymakers on the power that can be gained through monitoring, shaping, and controlling information systems that are critical to global well-being and security. Our study of LOGINK’s evolution demonstrates how Beijing has quietly accrued substantial political, economic, and military power not only through constructing, owning, and operating individual pieces of foreign logistics infrastructure (e.g., ports), but also through aggregating the vast amounts of data that flow through physical and digital logistics infrastructure.

In Western media coverage, China’s role in developing infrastructure overseas has overshadowed the broader power Beijing is gaining within critical global networks. Moreover, data-related security discussions in Washington have remained narrowly focused on individual PRC-based companies, such as Huawei, ZTE, or TikTok-parent Bytedance, rather than on the broader threat posed by Beijing’s systemic attempt to gain a dominant position in a variety of global systems and networks.[56] To successfully compete with China for global influence, it would behoove U.S. and allied policymakers to move beyond a myopic focus on the trustworthiness of individual companies, equipment, and nodes. They should instead focus strategically on the competition to shape and control critical internet-connected information networks and ecosystems.

Endnotes

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Epigraph: Jonathan E. Hillman, The Digital Silk Road (New York: HarperCollins, 2021), 12.

[1] China Power Team, “Will the Dual Circulation Strategy Enable China to Compete in a Post-Pandemic World?,” China Power, December 15, 2021, https://chinapower.csis.org/china-covid-dual-circulation-economic-strategy/.

[2] See United Nations Conference on Trade and Development Statistics, https://unctadstat.unctad.org/EN/Index.html.

[3] See Organisation for Economic Co-operation and Development, https://www.oecd.org/ocean/topics/ocean-shipping/.

[4] USCC Staff, “LOGINK: Risks from China’s Promotion of a Global Logistics Management Platform,” USCC Report, September 20, 2022, https://www.uscc.gov/sites/default/files/2022-09/LOGINK-Risks_from_Chinas_Promotion_of_a_Global_Logistics_Management_Platform.pdf.

[5] USCC LOGINK Report, see note 4.

[6] USCC LOGINK Report, see note 4.

[7] Cainiao Smart Logistics Network Limited is a Chinese logistics company launched by the Alibaba Group and others.

[8] USCC LOGINK Report, see note 4, at 8-9.

[9] “Cooperation agreement between Portbase and LOGINK,” 11 November 2019, Portbase, https://web.archive.org/web/20220407111221/https://www.portbase.com/en/cooperation-agreement-between-portbase-and-logink/ (archived copy from Wayback Machine, accessed April 16, 2023 — see also note 10); https://www.maqta.ae/en/news/2021/11/29/06/15/maqta-gateway-signs-cooperation-agreement-with-logink-in-china; “LOGINK Signs Up to IPCSA’s Network of Trusted Networks,” IPSCA, April 11, 2022, https://ipcsa.international/news/2022/04/11/logink-signs-up-to-ipcsas-network-of-trusted-networks/; National Public Information Platform for Transportation and Logistics Catalog of Public Logistics Information Data Resources https://www.logink.cn/attach/0/6ffb9e3671fb49b3b8d34c950dbed9b3.pdf.

[10] Daniel Michaels, “China’s Growing Access to Global Shipping Data Worries U.S.,” Wall Street Journal, December 20, 2021, https://www.wsj.com/articles/chinas-growing-access-to-global-shipping-data-worries-u-s-11640001601.

[11] Isaac Kardon,  “Research & Debate — Pier Competitor: Testimony on China’s Global Ports,” Naval War College Review Vol. 74: No. 1, Article 11, https://digital-commons.usnwc.edu/nwc-review/vol74/iss1/11.

[12] As a point of comparison, one of LOGINK’s competing platforms, INTTRA’s Ocean Booking Platform, owned by E2Open, is estimated to cover 25% of global container traffic: see Michaels, “China’s Growing Access” in note 10; https://www.inttra.com/.

[13] Methodology: For PRC ports, we assume that all container flows are either through LOGINK covered ports or else can be queried by the platform, given its priority position and the participation of so many critical PRC-based shippers and logistics firms. In 2008, 16 PRC provinces signed an MOU to jointly put LOGINK in place and in 2009, the PRC Ministry of Transport and Zhejiang Provincial Government signed an MoU to upgrade LOGINK for nationwide coverage. We have not yet been able to locate any timelines showing when specific provinces or ports began feeding data into the system, but given LOGINK’s cloud-based nature, we assume that, once the political groundwork is laid, the system can be rapidly scaled on the technical side. Our estimates for LOGINK’s covered container traffic in the PRC may be artificially elevated during the first several years displayed.

We believe data on foreign ports are accurate across the time period of this estimate. For those foreign ports specifically named as LOGINK participants, we obtained actual annual TEU throughput data, to the extent possible, from the year in which the port commenced LOGINK participation until 2020. For two smaller countries with multiple participating ports (Latvia and UAE), we used national-level data from UNCTAD. Three Japanese ports with relatively small annual container throughputs (less than 400,000 TEU apiece) did not appear to have consistent publicly available annual throughout data (Kawasaki, Niigata, and Yokkaichi). For these, we tried to find at least one data point and then use that value as a placeholder for its remaining years of participation in LOGINK. We believe those ports to be de minimis as a proportion of overall LOGINK covered container volumes. Some other ports required between one and three years out of a 9-year span to be estimated. Separately, foreign ports participating in LOGINK vary in the specific types of data they provide to LOGINK. For instance, some ports may provide only vessel data while others provide both vessel and container-specific information.

The graph here estimates overall container traffic that transits through LOGINK-participating ports; it is not an estimate of the containers that LOGINK tracks at the container level. Finally, some containers may be counted twice because they transit through more than one port covered by LOGINK. Using only public data, it is not possible to remove potential double counting, though we do not believe it substantially alters the above estimate.

[14] https://www.logink.cn/col/col707/index.html. For a specific example of a Chinese Ministry of Transportation (MoT) effort to promote LOGINK in foreign countries, see MoT Vice Minister Liu Xiaoming’s 2018 presentation on promoting LOGINK and port construction by PRC firms in Central and Eastern European countries: Liu Xiaoming, Promoting Pragmatic Cooperation in Sea Ports Along the Belt and Road, Ministry of Transport, China, June 15, 2018, http://ceec-china-maritime.org/wp-content/uploads/2018/07/promoting-pragmatic-cooperation-in-sea-ports-along-the-belt-and-road-2.pdf.

[15] USCC LOGINK Report, see note 4.

[16] Gu Jingyan, National Transport and Logistics Information Platform in China LOGINK, Chinese Ministry of Transport, 2015, https://www.unescap.org/sites/default/files/01%20-%20LOGINK.pdf.

[17] “Regional Study: The Use of Logistics Information Systems for Increased Efficiency and Effectiveness,” UN ESCAP, 4 July 2016, https://www.unescap.org/resources/regional-study-use-logistics-information-systems-increased-efficiency-and-effectiveness, 4.

[18] Building a Logistics Information Sharing Bridge, LOGINK, February 19, 2019, https://unece.org/DAM/trans/doc/2018/itc/presentations/8.LOGINK_ENG_-_Ver.2_Wu.pdf.

[19] “Smart Airport,” Huawei, https://e.huawei.com/en/industries/aviation.

[20] IMSI is a 15-digit number assigned to the SIM of a mobile subscriber; IMEI is a 15-digit number assigned to every cellular device for each of its SIM slots: https://commsbrief.com/difference-between-imei-imsi-iccid-and-msisdn-numbers/.

[21] Keith Zhai and Yoko Kubota, “China to Restrict Tesla Use by Military and State Employees,” Wall Street Journal, March 19, 2021, https://www.wsj.com/articles/china-to-restrict-tesla-usage-by-military-and-state-personnel-11616155643.

[22] Steve Stecklow, Waylon Cunningham, and Hyunjoo Jin, “Special Report: Tesla Workers Shared Sensitive Images Recorded by Customer Cars,” Reuters, April 6, 2023, https://www.reuters.com/technology/tesla-workers-shared-sensitive-images-recorded-by-customer-cars-2023-04-06/.

[23] https://www.gm.com/onstar.

[24] Treston Wheat, “‘A State in Disguise of a Merchant:’ Multinational Tech Corporations and the Reconfiguration of the Balance of Power in Asia,” The Andrew W. Marshall Foundation, October 2022, https://www.andrewwmarshallfoundation.org/wp-content/uploads/2022/11/AStateinDisguiseofaMerchant_FINAL.pdf.

[25] “Chinese Communist Party Cells in Private Companies: Though Not Yet Universal, Increasingly Situated to Play Greater Roles in Corporate Governance,” Sayari Insights, April 7, 2021, https://sayari.com/resources/chinese-communist-party-cells-in-private-companies-though-not-yet-universal-increasingly-situated-to-play-greater-roles-in-corporate-governance/.

[26] Remarks of NCSC Director William Evanina to International Legal Technology Association (ILTA) LegalSEC Summit 2019, 4 June 2019, https://www.dni.gov/files/NCSC/documents/news/20190606-NCSC-Remarks-ILTA-Summit_2019.pdf.

[27] Emily de La Bruyère and Nathan Picarsic, “Made in Germany, Co-opted by China,” Foundation for Defense of Democracies, October 2020, https://www.fdd.org/analysis/2020/10/14/made-in-germany-co-opted-by-china/ (Original source: Lian Zheng, “打破信息孤岛 创新政府服务——国家物流信息平台成为政府创新服务的有力实践 (Breaking Information Silos and Innovating Government Services-National Logistics Information Platform Becomes a Powerful Practice for Government Innovation Services),” Zhejiang Economy, 2017, Issue 22.)

[28] For an example of LOGINK’s efforts to set industry standards for logistics data sharing, see Gao Xiaoyun, “LOGINK & UNEFACT: On Supply Chain Information Harmonization,” May 28, 2021, available at https://unece.org/trade/documents/2021/06/presentations/ppt-0911th-international-seminar-trade-and-transport.

[29] USCC LOGINK Report, see note 4.

[30] The term “commanding heights” originates from a speech by Vladimir Lenin, who used the phrase to refer to “the segments of the economy that largely control or support the others, such as oil, railroads, banking and steel:” Daniel Costello, “The Commanding Heights,” NPR Planet Money, January 14, 2009, https://www.npr.org/sections/money/2009/01/commanding_heights_of_the_econ.html.

[31] Jonathan Saul and Eduardo Baptista, “Off the Grid: Chinese Data Law Adds to Global Shipping Disruption,” Reuters, November 17, 2021, https://www.reuters.com/world/china/off-grid-chinese-data-law-adds-global-shipping-disruption-2021-11-17/.

[32] 数据服务 (“data service”), https://www.logink.cn/col/col15/index.html.

[33] https://www.unescap.org/sites/default/files/01%20-%20LOGINK.pdf.

[34] https://www.statista.com/chart/20858/top-10-countries-by-share-of-global-manufacturing-output/.

[35] Kai-Fu Lee, “Tech Companies Should Stop Pretending AI Won’t Destroy Jobs,” MIT Technology Review, February 21, 2018, https://www.technologyreview.com/2018/02/21/241219/tech-companies-should-stop-pretending-ai-wont-destroy-jobs/.

[36] Cloud native is the software approach of building, deploying, and managing modern applications in cloud computing environments: https://aws.amazon.com/what-is/cloud-native/.

[37] Aaron Tam, “Why Databases are Key to Alibaba’s Singles’ Day Sales,” ComputerWeekly.com, November 19, 2020, https://www.computerweekly.com/news/252492346/Why-databases-are-key-to-Alibabas-Singles-Day-sales.

[38] "Internet of Things" definition: https://www.merriam-webster.com/dictionary/Internet%20of%20Things.

[39] Beijing has long enlisted selected business and financial constituencies in the U.S. to promote its interests.

[40] Nicole Kobie, “The Complicated Truth About China’s Social Credit System,” Wired, July 6, 2019, https://www.wired.co.uk/article/china-social-credit-system-explained.

[41] Kobie, “The Complicated Truth,” see note 40.

[42] Peter Harrell, Elizabeth Rosenberg, and Edoardo Saravalle, “China’s Use of Coercive Economic Measures,” Center for a New American Security, June 11, 2018, https://www.cnas.org/publications/reports/chinas-use-of-coercive-economic-measures.

[43] Iori Kawate, “China Takes Aim at Foreign Companies Swayed by US Sanctions,” Nikkei Asia, January 10, 2021, https://asia.nikkei.com/Economy/Trade-war/China-takes-aim-at-foreign-companies-swayed-by-US-sanctions.

[44] “Logistics Visibility Task Force Initiates New Blockchain Project,” International Port Community Systems Association, June 18, 2020, https://ipcsa.international/news/2020/06/18/logistics-visibility-task-force-initiates-new-blockchain-project/.

[45] Lorand Laskai and Adam Segal, “The Encryption Debate in China: 2021 Update,” Carnegie Endowment for International Peace, March 31, 2021, https://carnegieendowment.org/2021/03/31/encryption-debate-in-china-2021-update-pub-84218.

[46] Dana Mattioli, “Amazon Scooped Up Data From Its Own Sellers to Launch Competing Products,” Wall Street Journal, April 23, 2020, https://www.wsj.com/articles/amazon-scooped-up-data-from-its-own-sellers-to-launch-competing-products-11587650015.

[47] Renee Dudley, “Amazon’s New Competitive Advantage: Putting Its Own Products First,” ProPublica, June 6, 2020, https://www.propublica.org/article/amazons-new-competitive-advantage-putting-its-own-products-first.

[48] Dudley, “Amazon’s New Competitive Advantage,” see note 47.

[49] For a superb account of the Veracruz affair, see Jack Sweetman, “Take Veracruz at Once,” Naval History Magazine March 2014, Vol 28, No 2, https://www.usni.org/magazines/naval-history-magazine/2014/march/take-veracruz-once.

[50] Chad P. Bown, “US-China Trade War Tariffs: An Up-to-Date Chart,” Peterson Institute for International Economics, April 6, 2023, https://www.piie.com/research/piie-charts/us-china-trade-war-tariffs-date-chart.

[51] Nichola Groom, “U.S. to Expand Solar Panel Tariffs After Probe Finds Chinese Evasion,” Reuters, December 2, 2022, https://www.reuters.com/markets/commodities/us-says-solar-imports-four-southeast-asian-countries-were-dodging-china-tariffs-2022-12-02/ and “EU Imposes Tariffs on Chinese Aluminium producers,” Reuters, March 30, 2021, https://www.reuters.com/article/us-eu-china-aluminium-idUSKBN2BM28V.

[52] As a recent example of how PRC official control of the global logistical system’s commanding data heights has the potential to create murky connections which are seriously adverse to U.S. and partner nation interests, consider alleged links between PRC officials and a multi-billion dollar narcotics money laundering enterprise: Sebastian Rotella and Kirsten Berg, “How a Chinese American Gangster Transformed Money Laundering for Drug Cartels,” ProPublica, October 11, 2022, https://www.propublica.org/article/china-cartels-xizhi-li-money-laundering. See also Vanda Felbab-Brown, “China and Synthetic Drugs Control: Fentanyl, Methamphetamines, and Precursors,” Brookings Institution, March 2022, https://www.brookings.edu/research/china-and-synthetic-drugs-control-fentanyl-methamphetamines-and-precursors/.

[53] Diane K. Morales and Steve Geary, “Speed Kills: Supply Chain Lessons from the War in Iraq,” Harvard Business Review, November 2033, https://hbr.org/2003/11/speed-kills-supply-chain-lessons-from-the-war-in-iraq.

[54] Morales, “Speed Kills,” see note 53.

[55] “Beijing Warns Against Taiwan Ties as Singapore Tries to Free Troop Carriers in Hong Kong,” Reuters, November 25, 2016, https://www.voanews.com/a/beijing-singapore-troop-carries-taiwan/3611468.html.

[56] For a recent example, see Aruna Viswanatha, Gordon Lubold, and Kate O’Keefe, “Pentagon Sees Giant Cargo Cranes as Possible Chinese Spying Tools,” Wall Street Journal, updated March 5, 2023, https://www.wsj.com/articles/pentagon-sees-giant-cargo-cranes-as-possible-chinese-spying-tools-887c4ade.

 

 

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