Pinglu Canal officially opens, cutting inland waterway distance for SW China cargo by over 560 km

On September 16, the backbone project of the Pinglu Canal officially opened to navigation, rewriting the history of Southwest China's maritime access by eliminating the need for detours. After opening, cargo from Southwest China traveling via the Pinglu Canal to the sea will shorten inland waterway distances by more than 560 kilometers compared with traditional routes.

In 2025, bilateral trade between China and ASEAN surpassed the $1 trillion mark for the first time, with ASEAN remaining China's largest trading partner for six consecutive years. What is the strategic value of the Pinglu Canal's opening? Let's find out below.

How Will the Opening of the Pinglu Canal Reshape Guangxi's Trade and Industrial Landscape?

Zhou Yamin, Researcher at the Institute of Asia-Pacific and Global Strategy, Chinese Academy of Social Sciences, and Director of the Regional Cooperation Office:

Guangxi has gained access to the sea; the key lies in transforming its locational advantages into functional hubs. Previously, Guangxi enjoyed the "three along" advantages—along the coast, along rivers, and along borders—but these three advantages were not coordinated within a single low-cost corridor. The opening of the Pinglu Canal integrates the triple advantages of sea, river, and border into one transportation system, turning Guangxi from a terminal point of corridors into a hub node.

In the long term, this will bring about three major changes:

• First, the relationship between Nanning and the port/coastal areas will be rewritten. Inland ports and seaports will no longer be two separate systems but rather upstream and downstream components of the same cargo organization network.

• Second, bulk commodities suitable for water transport, mechanical equipment, grain and oil processing industries, etc., will begin clustering along both banks of the canal.

• Third, Guangxi's negotiating position in the regional economic structure will significantly improve, as it can both absorb industrial transfers from the Guangdong-Hong Kong-Macao Greater Bay Area and directly organize production activities targeting the ASEAN market.

What Opportunities Does the Canal Offer Beyond Cost Savings for Southwest China?

Zhou Yamin:

Other southwestern provinces will also see an expansion of their trade possibility frontier. Previously, lacking direct sea access, many inland provinces relied solely on resources or agricultural exports, or engaged directly in finished-product manufacturing. With the opening of the Pinglu Canal, changes in industrial division of labor become possible. These regions can now engage in processing, logistics, subcontracting, and even trade settlement.

As the Pinglu Canal develops further and production activities expand, corresponding service industries can follow suit. For instance:

• Growing interest in the scenery along the canal will boost traditional services such as tourism, accommodation, and catering.
• Service industries related to production activities will also develop, including financial services tailored to small and medium-sized enterprises, RMB settlement, currency swaps, and other intangible services.

In Which Direction Will Manufacturing in Southwest China Develop?

Zhou Yamin:

The shipbuilding industry is highly integrated, with its upstream and downstream supply chains driving development in other sectors. As a large-scale manufacturing sector, shipbuilding exhibits strong multiplier effects across its supply chain.

For Southwest China as a whole, the Pinglu Canal alters the economic geography. Once the economic geographic structure changes, industrial structures will also shift, leading to significant improvements in employment, living standards, and various services for residents. Thus, the Pinglu Canal brings Southwest China not just shorter shipping distances, but effectively reduces both temporal and institutional distances between the southwestern hinterland and maritime markets.

How Will This Route Affect China-ASEAN Economic and Trade Relations?

Zhou Yamin:

The opening of the Pinglu Canal is a crucial link in China-ASEAN multimodal transport combining rail, road, and water. High-speed rail, expressways, and water transport address different types of needs:

• High-speed rail primarily solves passenger transport and timeliness issues.
• Expressways mainly address door-to-door delivery and flexible distribution.
• Water transport focuses on high-volume, low-cost, and low-emission solutions.

After the Pinglu Canal opens, it will accommodate vessels of up to 5,000 deadweight tons. A 5,000-ton vessel carries roughly the equivalent of dozens of heavy trucks, greatly improving efficiency for low-cost, long-distance transport of grain and oil products, bulk commodities, mechanical equipment, daily necessities, and more.

Leveraging the Pinglu Canal:

• Chinese mechanical equipment can move southward to ASEAN countries faster.
• ASEAN agricultural products, bulk commodities, and critical minerals can move northward more quickly to China's southwestern hinterland for processing.

Within this framework of bidirectional interaction, improved efficiency, and virtuous cycles, the vitality of China-ASEAN economic and trade relations will be further unleashed.

Will the Opening of the Pinglu Canal Strengthen Ties Between China and ASEAN?

Zhou Yamin:

The opening of the Pinglu Canal will influence not only China-ASEAN supply and industrial chain relationships. Strictly speaking, previous China-ASEAN relations were primarily trade-based, centered on exchanging agricultural and industrial goods. After the canal opens, with efficient circulation of intermediate and processed products, China-ASEAN relations may transition from trade partnerships to something else.

From an economic perspective, this represents a significant change. In the process of regional economic integration, when cross-border supply and industrial chain relationships evolve into production partnerships, it will have a substantial positive impact on enhancing regional economic integration.

We also hope that through the Pinglu Canal corridor, after China and ASEAN transform from trade partners into production partners, we can jointly explore greater cooperation space in third-party markets.

Producer | Liu Mingjun, Kong Qian Planner | Gao Lan Directors | Zhang Jin, Wei Xuejiao, Liu Zhe, Zhao Wei Production Team | Li Yang, Jiang Yu, Xie Chaoquan, Lü Yang, Duan Haochen