China has inaugurated the Pinglu Canal in the Guangxi Zhuang Autonomous Region, a strategic waterway designed to bolster trade with Southeast Asia by providing a shorter maritime route. The canal, spanning 134.2 kilometers and constructed at a cost of approximately 72.7 billion yuan ($10.75 billion), connects Hengzhou to the Beibu Gulf, forming a crucial part of the New International Land-Sea Trade Corridor.
The canal is engineered to handle ships of up to 5,000 tonnes, significantly reducing the traditional inland waterway distance to the sea by over 560 kilometers through Guangdong’s ports. Authorities project that this development will cut logistics costs by 18% to 30%, resulting in annual transportation savings exceeding 5 billion yuan.
This infrastructure is particularly impactful for southwest China, where businesses have long faced high costs in moving goods to coastal ports. Commodities such as coal, grain, minerals, new-energy materials, and automobile parts will now have a more direct path to international markets, enhancing trade efficiency.
To address environmental concerns, the canal project includes several sustainable features. More than 98% of the excavated materials were repurposed, and the canal is equipped with a fish passage and wildlife crossing. Water conservation is also a priority, with systems in place to save over 1 billion cubic meters of water annually.
The Pinglu Canal is expected to strengthen economic ties between China and ASEAN, its largest trading partner. In 2025, China-ASEAN trade surpassed $1 trillion, with trade figures reaching $744.41 billion in the first seven months of 2026. The new route is anticipated to attract further investment and enhance supply chain integration along its path, facilitating smoother goods movement between southwest China and Southeast Asian markets.