[Big read] Pinglu Canal: Redrawing China-ASEAN trade routes

On a weekend in late March, excavators roar along the river channel at the construction site of the Pinglu Canal in Guangxi, China. With less than six months remaining before the target operational date, there has not been a moment’s pause in the ongoing work. 

The sheer scale of the project is underscored by the prominent sign on the hillside behind the channel, bearing the bold words: “Project of the century — Pinglu Canal”.

Why is it called the “project of the century”? The Pinglu Canal is the first canal project since the founding of the People’s Republic of China in 1949, connecting inland rivers directly to the sea. With a total investment of over 70 billion RMB (US$10.3 billion), the project is also the first canal to be built since the Beijing-Hangzhou Grand Canal.

The Pinglu Canal stretches 134.2 kilometres southward from Hengzhou, under the jurisdiction of Nanning, the capital of Guangxi, and flows into the Gulf of Tonkin, or known as Beibu Gulf in China, via the Qin River. Over the past four years, over 20,000 workers and 5,000 machines have worked tirelessly to meet the navigation target set for September this year.

According to my observations at the Madao Junction — one of the canal’s most critical construction projects — this structure, located midstream and described as “the world’s largest inland water-saving ship lock currently under construction”, has largely taken shape. Viewed from above, it resembles a layered, interwoven underground city dense with steel reinforcement. In reality, it is a massive, multi-tiered lock system that enables 5,000-tonne vessels to traverse a height difference equivalent to a nine-storey building and reach the Gulf of Tonkin.

As the canal approaches its operational countdown, expectations within Guangxi’s logistics sector continue to rise. Wei Zhiming (pseudonym), a freight agent at a local logistics firm, remarked, “This river has given me a reason to stay and build my career in my hometown.”

The Pinglu Canal is regarded as a key lever for Guangxi’s development because it opens a direct waterway from the region’s inland river system to the sea.

Previously, cargo vessels from Guangxi and southwestern China had to detour eastward along the Xi River via Guangdong to get to the sea, creating the awkward situation where “Guangxi’s goods do not depart from Guangxi’s ports”. The Pinglu Canal addresses this gap by linking existing waterways through a newly constructed channel, allowing cargo ships to access the sea via the Gulf of Tonkin.

However, the canal also carries broader strategic significance. Chinese authorities describe it as a backbone project of the New International Land-Sea Trade Corridor. This corridor, centred on Chongqing with other western provinces and cities as nodes, transports goods by rail to Guangxi before transferring them to sea routes via the Gulf of Tonkin. When including segments beyond China’s borders, it is also referred to simply as the New Land-Sea Corridor.

The corridor is also a key component of the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity — the third intergovernmental project between China and Singapore — aimed at enhancing connectivity between western China and Southeast Asia.

The corridor was first proposed around 2016 under the name “Southern Corridor”, and renamed the New International Land-Sea Trade Corridor two years later. Singapore serves not only as an institutional partner but also as a key node within the shipping network.

At the ten-year mark of the corridor’s development, China has invested heavily in building a new maritime artery in Guangxi, with one objective being to improve efficiency and alleviate bottlenecks.

To understand the role of the Pinglu Canal within the corridor, it is necessary to review the corridor’s development over the past decade.

Since its inception, the corridor’s core advantage has been providing western China with an alternative route to Southeast Asia that bypasses the longer eastbound Yangtze River shipping route. This alternative pathway has now opened up a considerable market.

Guangxi shipping operator Mo Jianhua (pseudonym) said when interviewed, “The Southern Corridor has brought tremendous convenience to businesses in Chongqing.”

He cited the Chongqing-Vietnam route as a clear example: previously, goods transported via the Yangtze River to Shanghai for transshipment took more than 20 days; with rail-sea intermodal transport, the journey can now be completed in as little as four days.

Official Chinese data also indicate positive trends. By the end of November last year, over 5 million TEUs of shipments were made through the corridor. In foreign trade, Chongqing as a key hub recorded 52 billion RMB worth of goods moving via the corridor last year, representing a 150% increase year-on-year and driving a 12.6% rise in trade with ASEAN.

The development of the corridor has also transformed Guangxi’s ports. These changes are particularly evident at Qinzhou Port, located at the southern end of the Pinglu Canal.

Joshua Tang, president of the Brunei Guangxi Chamber of Commerce and engaged in Southeast Asian food products trade, said, “When I visited Qinzhou Port in 2020, it was still quite underdeveloped, with much of the infrastructure not yet in place. Now, there are hotels and business centres nearby, and more foreign enterprises are registering in Qinzhou. The business environment is quite good.”

During a visit to Qinzhou Port in late March, I saw densely stacked containers at the terminal, but it felt deserted as there were few workers around. An industry practitioner explained, “That’s because many operations have been automated.”

The automated terminal has become a signature feature of Qinzhou Port. From the observation deck, containers can be seen being lifted by robotic arms and transported by autonomous vehicles. According to the port operator, rail-sea intermodal transport aims to achieve seamless transfers — “from train to ship and vice versa”.

However, as a relatively new logistics corridor, the Land-Sea Trade Corridor still faces the unavoidable challenge of relatively low cargo volumes even after a decade of development.

Last year, container throughput at Guangxi’s Beibu Gulf Port exceeded 10 million TEUs, placing it among the ranks of “major ports handling over 10 million TEUs”. Nevertheless, industry participants note that, compared with major coastal ports such as Shanghai (over 50 million TEUs), Ningbo-Zhoushan (over 40 million TEUs), and Qingdao (over 40 million TEUs), Guangxi’s ports still lag significantly in throughput, with a relatively high proportion of domestic trade.

Peter Zhou, general manager of freight forwarding company Guangxi Di Yi Yun, said when interviewed that a considerable number of Chongqing businesses still choose to ship goods to Shanghai via the Yangtze River. This is due to various limitations of the corridor’s rail services, including limited capacity and stricter container safety requirements compared with maritime transport.

Some cargo owners also opt to ship from Guangdong due to the limited number of routes available at Qinzhou Port. Tang said, “I think the shipping routes of the corridor are still relatively limited. Recently, I wanted to transport mandarins to Surabaya in Indonesia. There is no direct route from Qinzhou Port, but there is one from Guangzhou, which takes only five days.”

The opening of the Pinglu Canal is aimed precisely at overcoming capacity constraints. A direct “river-sea link” between Nanning and Qinzhou will add a new sea access route for the southwest’s waterways, shortening the journey by 560 kilometres compared with current routes via Guangdong.

Zhou described, “The canal’s greatest significance is that it will boost Guangxi’s trade and increase container throughput at Qinzhou Port.”

However, he remains cautious: “Whether we can actually benefit from this wave of enthusiasm is uncertain. Freight forwarders at coastal ports are fiercely competitive; many may rush in, and newcomers could try to grab market share with low prices.”

For Singapore and Southeast Asia, the greater significance of the Pinglu Canal lies in the prospect of goods from southwestern China reaching Southeast Asian markets more directly and at lower cost.

Operators in Singapore are preparing for the canal’s opening. A spokesperson for the China operations of PSA International, a shareholder in Beibu Gulf Port Group, said the company is working with local partners to handle higher cargo volumes and ensure smooth barge links with the deep-sea terminal, adding that the Pinglu Canal will expand hinterland access while providing a more cost-effective, resilient alternative to road and rail within the New International Land–Sea Trade Corridor.

According to an analysis by Chinese think tank Pangoal, the unit cost of water transport is estimated to be around 50-60% of rail transport, and 12-15% of road transport.

Singapore shipping company Pacific International Lines (PIL), which entered Guangxi in 2011 and operates routes between Qinzhou, Vietnam and Singapore, has expressed an optimistic outlook on the Pinglu Canal.

A PIL spokesperson said shippers could see logistics costs fall by 18–30%, alongside improved capital turnover and reduced inventory pressure due to shorter transit times. For carriers, the canal is expected to attract more cargo to Qinzhou as an export gateway, providing a more stable cargo base and higher vessel utilisation.

PIL also noted that efficiency gains would strengthen its China-Singapore Nanning International Logistics Park, enabling it to better consolidate, containerise and export goods from western China to Southeast Asia.

A Singapore-based logistics operator also said the New International Land–Sea Trade Corridor still has significant room to expand, particularly in connectivity to long-haul markets. He noted that while it has met targets in cargo volume and regional links over the past decade, its reach beyond Southeast Asia remains limited and could better leverage Singapore’s role as a maritime hub. “In its first ten years, the corridor mainly served Southeast Asia; in the next ten years, it should expand into broader long-haul markets,” he said.

Six months ago, Wei Zhiming, who had worked in the logistics industry in Ningbo for six years, returned to his hometown in Guangxi to become a freight forwarding agent. Despite being well aware of the significant gap in port development between the two places, he still chose to bet on Guangxi, reasoning that he “might be among the first to get a slice of the pie”.

The Pinglu Canal is a major project, and together with intensive official promotion, it has heightened expectations among Guangxi’s business circles and the public. Wei said, “In the past, we all went to Guangdong for work. Now there are more options. More people may choose to stay in or return to Guangxi to work.”

On social media, bloggers have excitedly described the Pinglu Canal as enabling Guangxi to “change the course of its destiny”, even claiming that “Guangxi is about to turn the corner” and “is set to take off completely”.

The Guangxi people’s expectations stem from the region’s development situation. For a long time, Guangxi has lagged behind other coastal provinces in China economically, due to factors such as the geographic constraint of its river-sea separation; its main industries — such as food processing and machinery — being positioned at the lower to mid-end of the value chain; and having missed earlier opportunities for integrated development with Guangdong.

As the construction of the Pinglu Canal began, a widely held expectation is that it will reshape Guangxi’s regional development pattern. Late last year, Xu Yongke, a Standing Committee member of the Guangxi Zhuang Autonomous Region and Nanning party secretary, noted that Guangxi will leverage the canal to drive an I-beam-shaped economic belt linking the Pearl River-Xi River system, the Pinglu Canal and the coastal areas, thereby boosting regional development.

Fu Yuanjia, a professor at Guangxi University of Foreign Languages’ School of Digital Economy and Management and an expert with the Guangxi Council for the Promotion of International Trade’s Belt and Road Initiative think tank, noted that discussions surrounding the Pinglu Canal broadly fall into optimistic and pessimistic views. 

Optimists believe the Pinglu Canal will increase trade and investments. Meanwhile, pessimists question Guangxi’s weak industrial base, asking, “What is there to transport? Sugarcane and cement?” 

Others argue, “If more than 70 billion RMB is spent on construction and tolls end up high, wouldn’t using roads or rail be just the same?”

Fu takes a more optimistic view. While acknowledging Guangxi’s limitations, he said the canal’s significance should be assessed beyond the region — at the national level and within China’s relations with ASEAN and the wider international context — to fully understand its impact.

Fu put forward a proposal to build an “internationalised Beibu Gulf economic circle city cluster”, with Qinzhou in Guangxi as the core hub and Hanoi in Vietnam, Nanning in Guangxi, and Haikou in Hainan as key axes, thereby forming a new international economic growth pole.

However, he cautioned, “It doesn’t end with building a canal.” Supporting port infrastructure still needs to be improved, rules and management systems for river-sea intermodal transport still need to be streamlined, and industries must be gradually introduced. “If there’s nothing to transport, it will just end up as a ditch.”

Meanwhile, political shifts may also affect local development momentum. After Lan Tianli, former chairman of the Guangxi regional government, fell from grace in May last year, issues from his tenure surfaced, including environmental concerns. Industry insiders said some projects he led, including the New International Land–Sea Trade Corridor, faced disruptions, denting business confidence. Last year, party secretary Chen Gang urged efforts to minimise the case’s impact on government operations and economic activity.

However, as the New International Land-Sea Trade Corridor is a national strategy for China and the Pinglu Canal a key project within it, construction has been advancing. In December 2025, Chen stressed that Guangxi should “seek strength through the sea” and use the Pinglu Canal to drive high-quality industrial and socioeconomic development along its route.

In contrast to official enthusiasm, some residents living near the canal have voiced strong grievances. In Niuying village, near the Madao Junction, a villager complained that he had previously farmed nearby land, which was later seized for the canal project, but the compensation he received was too low.

Now unemployed, he lamented, “I have no fields or land left. There’s no security for the future. If I get the chance, I might leave.” 

He said bluntly, “The Pinglu Canal hasn’t given me hope, only disappointment.”

For ordinary residents whose livelihoods are not directly tied to the Pinglu Canal, whether this “project of the century” will bring tangible benefits remains to be seen. Even among logistics operators, some are cautious to take a more pragmatic view.

Shipping operator Mo said, “While I have my expectations for the Pinglu Canal, I also need to manage them. I can’t stake my whole livelihood on it.”

However, he believes that the canal will create more opportunities for the Gulf of Tonkin regardless. He said, “There’s no need to compare with Guangzhou or Shenzhen. It’s unrealistic to expect Guangxi to surpass them as soon as the canal opens. But it will make the Gulf of Tonkin a stronger and better version of itself.”

This article was first published in Lianhe Zaobao as “世纪运河开通广西 十年砥砺开创新局”.

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