The opening of the 134.2-kilometer-long Pinglu Canal in south China's Guangxi Zhuang Autonomous Region is expected to strengthen trade and logistics links between China's southwestern regions and Southeast Asia.

Scheduled to open on September 16, it connects the Xijiang River shipping network with the Beibu Gulf and can accommodate vessels of up to 5,000 tonnes.

As a key part of the New International Land-Sea Trade Corridor, the canal provides a more direct route from China's inland regions to the sea and onward to ASEAN markets.

A shorter route to the sea

For the southwest, cargo bound for international markets has traditionally relied on routes through China's eastern and southern coastal ports.

Pinglu Canal will shorten the traditional shipping distance between southwest China and Southeast Asian markets  by over 560 kilometers, reduce logistics costs by 18-30 percent and cut 5.2 billion yuan (about $775 million) in logistics costs annually, China Media Group reported.

The impact could be particularly significant for bulk commodities, including minerals, coal, grain and construction materials, where transportation costs account for a relatively large share of the total costs.

The canal will also strengthen the Beibu Gulf's role as a maritime gateway for China's inland provinces. Cargo from the southwest will be able to reach Southeast Asian markets through the Beibu Gulf without first traveling eastward to ports in Guangdong Province.

Strengthening an existing trade corridor

Pinglu Canal is part of the New International Land-Sea Trade Corridor, a logistics network linking western China with Southeast Asia through railways, roads, waterways and ports. The canal adds a water connection to the corridor, linking China's inland river system with the ports and shipping routes of the Beibu Gulf. 

The corridor has already become an important route for trade between western China and ASEAN, Singaporean newspaper Lianhe Zaobao reported. By the end of November last year, more than 5 million twenty-foot equivalent units (TEUs) had been transported through the corridor. The Pinglu Canal is expected to strengthen the connection between the corridor's inland origins and its maritime gateway in Guangxi.

Zhou Yan, deputy general manager of Beibu Gulf Port International Port Group, told The Straits Times that the canal could add about 3.5 million tonnes of cargo throughput when it opens and potentially reach 150 million tonnes annually in the longer term.

The development comes as China-ASEAN trade continues to expand.

China and ASEAN have been each other's largest trading partners for six consecutive years. In the first half of 2026, bilateral trade reached 4.34 trillion yuan, up 18.2 percent year on year, according to the General Administration of Customs. Beibu Gulf Port is also expanding rapidly. Its container throughput reached about 10 million TEUs in 2025, compared with 2.28 million TEUs in 2017.

The combination of a growing port and a new inland waterway could further increase the volume of goods moving between western China and Southeast Asia.

Implications for supply chains

The canal could also support closer links between China's manufacturing base and Southeast Asia's expanding production networks.

Chinese companies have increasingly expanded manufacturing operations in Southeast Asia, while ASEAN economies have become important destinations for Chinese investment and production.

Priyanka Kishore, chief economist and director of Singapore-based Asia Decoded, told Nikkei Asia that the development could strengthen ASEAN's position in global supply chains by supporting the region's role as a cost-efficient manufacturing hub.

Her assessment points to another potential role for the canal: facilitating the movement of raw materials, components and finished products between southwest China and Southeast Asia.

For ASEAN exporters, the canal could also improve access to China's inland markets.

Agricultural products and minerals could move north through the Beibu Gulf, while Chinese manufactured goods, including consumer products and industrial equipment, could move south toward Southeast Asian markets.

Shipping companies are preparing

The potential increase in cargo flows is already drawing attention from international logistics companies.

A spokesperson for PSA International, a global port operator and supply chain company headquartered in Singapore, told Lianhe Zaobao that the company is preparing with local partners for higher cargo volumes after the canal opens. The company is also working to establish smoother barge connections with the deep-sea terminal at Qinzhou.

According to the PSA spokesperson, the canal could provide a more cost-effective and resilient transport option within the New International Land-Sea Trade Corridor.

Closer China-ASEAN connection  

The Pinglu Canal is being completed at a time when China-ASEAN economic ties are expanding rapidly.

For southwest China, it provides a shorter route to the sea and Southeast Asian markets. For Guangxi, it strengthens the region's role as a gateway between China's inland provinces and ASEAN countries. For Southeast Asian economies, it offers another logistics route into China's large inland market.

As China-ASEAN trade, investment and supply-chain links continue to expand, the Pinglu Canal is expected to play a growing role in connecting the two sides.