China has inaugurated the Pinglu Canal in the Guangxi Zhuang Autonomous Region, establishing a more direct waterway between southwest China and the sea, thereby enhancing trade connections with Southeast Asia. This strategically important canal is a key part of the New International Land-Sea Trade Corridor, which aims to improve transportation links between China’s inland regions and ASEAN markets.
Spanning 134.2 kilometers, the canal links Hengzhou with the Beibu Gulf and has been constructed at a cost of approximately 72.7 billion yuan ($10.75 billion). Designed to accommodate vessels up to 5,000 tonnes, the canal significantly reduces the journey to the sea by more than 560 kilometers compared to traditional inland routes through Guangdong ports. This new route is expected to cut logistics costs by 18% to 30%, saving over 5 billion yuan annually in transportation expenses.
The canal’s opening is particularly beneficial for southwest China, where businesses have faced higher costs when transporting goods to coastal regions. Now, commodities such as coal, grain, minerals, new-energy materials, and automobile parts can be transported more efficiently to overseas markets. The project includes three navigation hubs equipped with twin-line ship locks to manage a 65-meter difference in water levels, along with water-recycling systems that will conserve more than 1 billion cubic meters of water each year.
Environmental considerations were integral to the canal’s construction, with over 98% of the excavated earth and rock being reused. Additionally, the canal incorporates a fish passage and wildlife crossing to minimize its ecological impact. These measures reflect a commitment to sustainable development in the region.
The Pinglu Canal is expected to bolster economic ties between China and ASEAN, its largest trading partner. In 2025, trade between China and ASEAN exceeded $1 trillion, and in the first seven months of 2026, trade reached $744.41 billion. The canal could also encourage greater investment and supply-chain integration along its route, facilitating improved movement of goods between southwest China and Southeast Asian markets.