The Pinglu Canal gives landlocked southwestern China faster, cheaper access to the sea and offers maritime ASEAN a new route to European markets through China’s freight rail network. Its benefits can flow both ways, from Vietnamese exporters reaching inland China to new momentum for the Beibu Gulf region, while also showcasing China’s engineering capacity.
The newly opened Pinglu Canal will further boost trade and connectivity between China and Southeast Asia. The 134.2-kilometer waterway links Pingtang Estuary in Hengzhou, a county-level city administered by Nanning, to the Beibu (Tonkin) Gulf. It provides landlocked southwestern China with shorter access to the sea. It gives maritime ASEAN a new option to reach Western export markets via China-Europe trains. It complements the Hainan Free Trade Port and injects new vitality into the broader Beibu Gulf Economic Rim. The completion of the RMB72.7 billion undertaking in four years marks a new milestone in China’s massive infrastructure portfolio, showcasing its construction capacity to the global market. Strategically, Pinglu will buttress China’s inland navigation system, providing alternative transport links between the country's north and south, which can be useful in the event of contingencies in the South China Sea or Taiwan Strait.
Serving growing economic interdependence
The canal opened for navigation on September 16th, a day before the 23rd China-ASEAN Expo held annually in Nanning. The place and timing are no coincidence. Six ASEAN countries have consulates in Guangxi’s capital, and the canal reinforces growing ASEAN-China economic interdependence. This year’s CAEXPO Country of Honor is the Philippines, and the country’s Trade and Industry Secretary Cristina Roque spoke at the opening ceremony. She reaffirmed the “shared commitment to strengthening Asean-China cooperation to trade, investment, and people-to-people ties.” China has been ASEAN’s largest trade partner for the last 17 years. China and ASEAN have been each other’s largest trade partners for six consecutive years. The ASEAN-China Free Trade Agreement was upgraded last year, and this year marks the fifth anniversary of the ASEAN-China Comprehensive Strategic Partnership, the highest form of relations the 11-member organization accords to external partners.
Geographic proximity positions southern Chinese provinces as gateways to ASEAN, with infrastructure being a crucial piece. The China-Myanmar oil and gas pipeline, Laos-China railway, and the upgrading of the Haiphong-Kunming railway raise Yunnan’s profile. So does the linking of the Bangkok-Nong Khai high-speed rail, currently under construction, to the Laos-China railway via the Lao capital, Vientiane. The Hainan Free Trade Port and 30-day visa-free entry to nationals of 61 countries (including citizens of 7 ASEAN states) strengthen the case for the island-province. The Pinglu Canal, connecting the inland Xijiang River to the Qinzhou international seaport, could be a game-changer for Guangxi.
The waterway, which can accommodate vessels up to 5,000 tons, opens windows for southwestern China and maritime ASEAN. It gives fresh impetus to the multimodal New International Land-Sea Trade Corridor. Railways and ports are quickly linking China and ASEAN, and Pinglu will be a new enabler. Goods from landlocked Chongqing, Sichuan, Yunnan, Guizhou, and Guangxi’s interior now have easier access to the sea compared to the longer route through Guangdong ports, cutting over 560 kilometers of travel. Guangxi officials forecast a substantial reduction in logistical costs of 18-30%, saving more than RMB5 billion (US$745 million) a year. Beibu Gulf Port, at the canal’s southern terminus, is bound to get more traffic. Its container capacity grew from 2.28 million twenty-foot equivalent units (TEUs) in 2017 to 10.06 million last year, buoyed by growing ASEAN-China trade.
Two-way street
Because of proximity, Vietnam stands to benefit significantly from the canal. In fact, one of the debut voyages in the canal was made by a container ship that sailed from Nanning to Can Tho Port in Mekong Delta. On the return trip, it carried 40 containers of Vietnamese rice bran. Other ASEAN maritime states can also seize the canal's value. Qinzhou Port has scheduled container services to Vietnam (Haiphong, Ho Chi Minh, Vung Tau), Singapore, Malaysia (Port Klang) and Thailand (Bangkok, Laem Chabang). The canal can help ASEAN exporters expand their transport options. From Qinzhou, goods from maritime ASEAN states can pass through the canal to reach Hengzhou/Nanning. From there, they can be moved by rail to Chongqing or Chengdu for the China-Europe freight service. Chongqing is linked by rail to Duisburg, Germany, while Chengdu connects to Lodz, Poland.
At the sub-regional level, the canal can give new stimulus to the Beibu Gulf Economic Rim. This promising corridor comprises Guangxi, Guangdong, Hainan, and northern Vietnam, especially the Red River Delta area that includes Hanoi and Haiphong. While the Rim may not have the same level of economic density as the Hong Kong-Greater Bay Area, it could develop into a logistics, production, and supply chain cluster. Pinglu can contribute to that. The canal can also bring new vigor to the Brunei-Guangxi Economic Corridor and the China-Malaysia “Two Countries, Twin Parks” (Qinzhou Industrial Park in Guangxi and Kuantan Industrial Park in Pahang, Malaysia).
Both ASEAN and China should try to maximize the canal. It should be a two-way street. As the first river-to-sea waterway built since the founding of the People’s Republic in 1949, it was considered the canal project of the century. It opens Guangxi’s hinterland, potentially developing a traditional backwater. Of course, shorter transport times and lower costs may increase competitive pressure on local ASEAN producers, creating challenges. But it can also generate opportunities. For instance, Vietnamese fruits, seafood, and coffee can expand their reach in inland China, while Vietnamese manufacturers and Chinese industrial investors in Vietnam can tap this new sourcing channel when procuring inputs.
Finally, Pinglu bolsters China’s infrastructure record. As the newest modern canal built, Pinglu introduced new engineering interventions. It features an advanced three-tiered water-saving basin design that recycles and reduces water consumption by 60%. Over 98% of excavated material - 315 million cubic meters of earth and rock – was also reused. It also has a fast water-saving lock system, integrated AI navigation monitoring, smart fish passage (powered by AI and sonar monitoring), and a dedicated wildlife bridge crossing. This burnishes China’s credentials as a key player in such vast and complex public works. China Road and Bridge Corporation (CRBC), a subsidiary of China Communications Construction Company (CCCC), is building Cambodia's Funan Techo Canal, which would link the Mekong to the Gulf of Thailand. The Pinglu feat also positions Chinese firms to take on Thailand’s Kra Canal or Nicaragua’s interoceanic canal projects should they be revived.
Connecting river to sea, the Pinglu Canal bridges land and sea to deepen economic ties between China and Southeast Asia.
