China Controls the Digital Supply Chain Backbone
When supply chain leaders think about China risk, they think tariffs, rare earth dependencies, and manufacturing concentration. But Altana AI CEO Evan Smith is sounding an alarm about a different kind of exposure — one that's invisible, instantaneous, and far harder to mitigate: China's control over the digital infrastructure that global trade runs on.
In a March 2026 exclusive with Semafor, Smith laid out a stark warning: Beijing didn't just build factories — it built the data layer that connects ports, cranes, logistics platforms, and shipping networks worldwide. And most Western companies never noticed.
The Warning: "They Can See What's Going to Lockheed"
Smith's central argument is chilling in its specificity. "[Beijing] can see what's going to Lockheed," he told Semafor. "They can shut down and divert goods, they can see supply chains and interfere."
This isn't theoretical. China's state-supported logistics data management platforms have been systematically connected to physical infrastructure — port operating systems, container tracking networks, crane control systems, and trade documentation platforms — creating a digital nervous system for global commerce that Beijing can observe and, potentially, manipulate.
The West, Smith argues, "didn't notice when China built out a state-supported logistics data management platform that connected to physical infrastructure such as ports and cranes." Now, with Beijing targeting chokepoints like rare earths and critical minerals, China "holds all the trump cards."
Physical vs. Digital Supply Chain Risk: A Critical Distinction
Most companies have spent the past five years building resilience against physical supply chain disruptions — dual sourcing, nearshoring, safety stock buffers, and regional diversification. These are important strategies, and they're accelerating. According to FreightWaves, tariff volatility is pushing companies deeper into supplier diversification and regional realignment in 2026, with Genpact's global supply chain lead noting that pandemic-era investments in visibility tools made companies surprisingly prepared for the current tariff environment.
But digital supply chain risk operates on an entirely different plane:
- Physical disruption is visible, localized, and unfolds over days or weeks. A port closure, a blocked strait, a factory shutdown — these are events you can see and react to.
- Digital interference is invisible, global, and instantaneous. If a state actor controls the data layer that routes, tracks, and documents shipments, they can observe competitive intelligence, manipulate routing decisions, or disrupt trade flows without a single physical asset being touched.
This distinction matters because virtually no company has mapped its digital supply chain dependencies the way it has mapped its physical supplier tiers.
The Interconnected Risk Vector
The digital threat doesn't exist in isolation. As SupplyChainBrain reports, geopolitics, commodity controls, and currency fragmentation are no longer separate risk domains — they represent "a single, interconnected risk vector" that compounds quietly and then reprices everything overnight.
China's control of 90% of global critical mineral refining capacity is well-documented. But when you combine mineral dominance with digital trade network control, the leverage is compounded exponentially. Beijing can simultaneously restrict physical inputs (rare earths, refined minerals) and observe which companies are scrambling for alternatives through the very digital platforms those companies use to manage logistics.
This is what makes the Altana warning qualitatively different from standard geopolitical risk assessments. It's not about one chokepoint — it's about control over the information layer that reveals all the other chokepoints.
What Companies Should Be Doing Now
1. Conduct a Digital Supply Chain Sovereignty Assessment
Map every digital platform, data system, and technology provider in your logistics stack. Where is shipment data stored? Who operates the port systems your containers flow through? Which trade documentation platforms process your customs filings? Most companies will be stunned by what they find.
2. Build Independent Visibility Infrastructure
The companies that emerged strongest from COVID disruptions were those that had already invested in control towers and real-time visibility. The same logic applies to digital sovereignty — companies need visibility platforms they control, built on infrastructure they trust, with data residency they can verify.
3. Integrate Geopolitical Intelligence Into Logistics Planning
Static risk assessments are insufficient. Supply chain leaders need real-time intelligence platforms that connect geopolitical signals — tariff changes, sanctions, diplomatic tensions — with operational data to model impact scenarios dynamically. According to FreightWaves, AI can now "connect external geopolitical signals with internal data to model impact scenarios in near real time."
4. Pressure-Test Digital Dependencies During Geopolitical Scenarios
Run tabletop exercises that don't just simulate physical disruptions (port closures, route blockages) but digital ones: What happens if a critical logistics platform goes offline? If shipment data is compromised? If routing algorithms are subtly manipulated? These scenarios may sound dramatic today but reflect capabilities that already exist.
The Hormuz Factor
The ongoing Iran conflict and Strait of Hormuz tensions add urgency to Smith's warning. During geopolitical crises, digital trade networks don't just report disruptions — they become potential instruments of interference. If Beijing controls the digital backbone that global shippers rely on for routing, tracking, and documentation during a crisis, that control becomes a geopolitical lever.
SupplyChainBrain's analysis is blunt: "Unlike the supply chain disruptions of the past decade, today's resilience challenges don't announce themselves. They compound quietly, then reprice everything overnight."
The Bottom Line
Evan Smith's warning forces a fundamental reframe: supply chain resilience isn't just about where you source and how you ship. It's about who controls the data layer underneath it all. Companies that have spent years building physical redundancy may find they've built it on a digital foundation they don't control.
The implications extend beyond individual companies to national security. If defense contractors, critical infrastructure operators, and essential supply chains all run on digital trade platforms with opaque foreign ownership or control, the vulnerability is systemic.
Digital supply chain sovereignty isn't a compliance checkbox — it's becoming a strategic imperative.
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