China has inaugurated the Pinglu Canal in the Guangxi Zhuang Autonomous Region, a strategic waterway that offers a more direct route from southwest China to the sea, bolstering trade with Southeast Asia. The canal, part of the New International Land-Sea Trade Corridor, aims to enhance logistics and economic ties with ASEAN countries.
Spanning 134.2 kilometers, the canal connects Hengzhou with the Beibu Gulf and was constructed at a cost of approximately 72.7 billion yuan ($10.75 billion). It allows vessels up to 5,000 tonnes to traverse its waters, significantly reducing the traditional inland waterway distance to the sea by over 560 kilometers, which previously routed through Guangdong ports. This development is expected to lower logistics costs by 18% to 30%, with annual transportation savings estimated at more than 5 billion yuan.
The canal is poised to transform supply chains, especially for businesses in southwest China that have historically faced higher costs for transporting goods to coastal ports. Key exports such as coal, grain, minerals, new-energy materials, and automobile parts will benefit from the shortened route to international markets.
To manage a 65-meter water level difference, the project includes three navigation hubs equipped with twin-line ship locks. Additionally, water-recycling systems are projected to conserve over 1 billion cubic meters of water annually, highlighting the project’s environmental considerations. More than 98% of the excavated material was reused, and the canal features a fish passage and a wildlife crossing to minimize ecological disruption.
China’s trade with ASEAN, which surpassed $1 trillion in 2025, is expected to further strengthen through this canal, with trade between the two regions reaching $744.41 billion in the first seven months of 2026. The new canal may also stimulate investment and supply-chain integration, enhancing the flow of goods between southwest China and Southeast Asian markets.