Chinese companies may soon have a significant advantage in the global market, thanks to China’s impressive logistics data management platform. According to a new report from Rice University’s Baker Institute for Public Policy, China’s state-supported National Public Information Platform for Transportation and Logistics (LOGINK) is on the cusp of creating a new and highly valuable asymmetric dependency that it could exploit for strategic gain. Beijing seeks to minimize its foreign dependencies while making trade partners more dependent on China, and superior logistics data tools represent an opportunity to advance those efforts.
The Power of Logistics Data Management
Logistics data management is an area where China already approaches global leadership status, and the authors of the report, Gabe Collins and Jack Bianchi, argue that LOGINK helps consolidate Beijing’s influence over the global maritime transport system, which moves an estimated 90% of the global goods trade. By aggregating data from various sources, including domestic and foreign ports, foreign logistics networks, hundreds of thousands of users in China, and other public databases, LOGINK provides the most comprehensive picture available of the world’s logistics activities.
LOGINK’s Evolution and Beijing’s Accrued Power
The authors’ study of LOGINK’s evolution demonstrates how Beijing has quietly accrued substantial political, economic, and military power. Not only has it constructed, owned, and operated individual pieces of foreign logistics infrastructure such as ports, but it has also amassed vast amounts of data flowing through its system. LOGINK provides Beijing with a wealth of information, which it can quietly feed to preferred Chinese logistics firms at preferential prices. This informational advantage gives Chinese firms the edge to systematically underbid foreign competitors and drive even more data flow over LOGINK.
Dependence and Conformity
Foreign entities dependent on the platform may be incentivized to conform to Beijing’s wishes or lobby for its interests, warn Collins and Bianchi. If Beijing could manipulate, corrupt, or obscure trade information that the U.S. and its allies might require to identify sanctions targets and enforce punitive measures, it 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.
Washington’s Need for Focus
Collins and Bianchi argue that Washington should focus on China’s strategy to control and shape such critical internet-connected information networks and ecosystems, which they say has been overshadowed by Congress scrutinizing individual Chinese companies such as Huawei, ZTE, and ByteDance, the parent company of TikTok. They believe that if Beijing achieves sufficient scale, it could use LOGINK as a new weapon in its arsenal.
Conclusion
The world is increasingly becoming more dependent on data, and China is taking advantage of this trend by consolidating its influence over the global maritime transport system through its logistics data management platform, LOGINK. While this is not inherently wrong, the potential for Beijing to manipulate, corrupt, or obscure trade information is concerning. By creating an asymmetric dependency that it could exploit for strategic gain, China seeks to minimize its foreign dependencies while making trade partners more dependent on China. Washington must focus on China’s strategy to control and shape critical internet-connected information networks and ecosystems to ensure that Beijing does not use such platforms as weapons in its arsenal.