China has inaugurated the Pinglu Canal in the Guangxi Zhuang Autonomous Region, a strategic move aimed at enhancing trade connectivity between southwest China and Southeast Asia. This new 134.2-kilometer waterway, which cost approximately 72.7 billion yuan ($10.75 billion), links Hengzhou to the Beibu Gulf, cutting over 560 kilometers from the traditional inland route to the sea.
The canal, part of the New International Land-Sea Trade Corridor, is a pivotal development for the region’s logistics, allowing vessels up to 5,000 tonnes to traverse its waters. Authorities anticipate a reduction in logistics costs by 18% to 30%, translating to more than 5 billion yuan in annual savings on transportation expenses. This development is particularly beneficial for southwest China, where businesses have historically grappled with higher costs for transporting goods to coastal ports.
The infrastructure includes three navigation hubs equipped with twin-line ship locks to manage a 65-meter difference in water levels, alongside water-recycling systems designed to conserve over 1 billion cubic meters of water annually. Environmental considerations have been integral to the project, with more than 98% of excavated earth and rock being repurposed, and the inclusion of a fish passage and wildlife crossing to mitigate ecological impacts.
By offering a more direct route for commodities such as coal, grain, minerals, new-energy materials, and automobile parts, the canal is set to bolster economic ties between China and ASEAN countries, which have become China’s largest trading partner. In 2025, China-ASEAN trade surpassed $1 trillion, with trade volumes reaching $744.41 billion in the first seven months of 2026 alone.
The Pinglu Canal is poised to not only facilitate more efficient trade but also stimulate investment and supply-chain integration along its route, enhancing the flow of goods between southwest China and Southeast Asian markets. This development marks a significant step in China’s efforts to strengthen its economic footprint in the region.