China Opens $10.75 Billion Canal To Boost Southwest Trade With ASEAN

China on Wednesday opened the $10.75 Pinglu Canal, creating a new maritime gateway for the country’s southwestern hinterland and providing a shorter route to deepen trade with Southeast Asia particularly with ASEAN region.

The canal forms part of the New International Land-Sea Trade Corridor, a strategic route linking China's inland provinces with ASEAN and other global markets. It is also the first river-to-sea canal project planned and coordinated at the national level since the founding of the People's Republic of China in 1949.

The waterway is particularly significant for southwestern China, which has historically lagged behind the more prosperous eastern coastal regions and faced higher costs in transporting goods to seaports.

Coal, ore, grain, new-energy materials and automobile parts from the region will now have a more direct route to international markets, state-run Xinhua news agency reported.

China's trade with ASEAN surpassed $1 trillion for the first time last year.

In the first seven months of 2026, bilateral trade reached $744.41 billion, up 24.7% year on year and accounting for 21.8% of China's total foreign trade during the period.

Designed to accommodate vessels of up to 5,000 tonnes, the canal cuts more than 560 km from the inland waterway journey between southwest China and the sea compared with traditional routes through ports in Guangdong Province.

It is expected to reduce logistics costs by 18 to 30% and save more than 5 billion yuan (about $1.4 billion) in transportation expenses annually, state-run Xinhua news agency reported.

Built for 72.7 billion yuan (about $10.75 billion), the 134.2-kilometre canal connects Nanning, capital of Guangxi Zhuang Autonomous Region, with the Beibu Gulf, the nearest maritime outlet for much of southwest China.

Lu Xinning, vice chairperson of the Guangxi regional government, said the canal establishes a new link between China's 1.4 billion consumers and ASEAN's nearly 700 million people.

Its significance could go beyond the movement of goods, Lu said, by encouraging cross-border investment and promoting deeper integration of regional supply chains.

The canal took more than four years to build. Most of the waterway was created by widening, deepening and straightening existing rivers, while some sections required excavation through dry land and mountainous terrain.

A major engineering challenge was overcoming a 65-metre difference in water levels. Three navigation hubs, each equipped with twin-line ship locks, were constructed to raise and lower vessels along the canal.

Environmental considerations were also incorporated into the project. More than 98% of the approximately 315 million cubic metres of excavated earth and rock was reused, Xinhua reported.

The canal also features a more than 480-metre-long fish passage and a dedicated wildlife crossing for land animals, including leopard cats and squirrels.

The canal opens in the first year of China's 15th Five-Year Plan period, covering 2026-2030, as Beijing seeks to promote more balanced regional development and expand high-standard opening up, it said.