China has opened its first modern river-to-sea canal, the Pinglu Canal, on September 16, 2026, aimed at reducing shipping distances and costs for trade with Southeast Asia. Located in Guangxi, the 134km (83-mile) canal connects the Xijiang River to the Beibu Gulf, facilitating access for provinces such as Yunnan and Guizhou to maritime trade routes. The canal is part of the New International Land-Sea Trade Corridor, which links southwestern China with Southeast Asian markets and is associated with President Xi Jinping's Belt and Road Initiative.
Local authorities estimate that the canal will decrease shipping distances by approximately 560km (350 miles) and logistics costs by 18 to 30 percent, potentially saving over 5 billion yuan (about $700 million) annually in transport costs. The canal can accommodate ships with a capacity of 5,000 tonnes and has an estimated construction cost of 72.7 billion yuan (approximately $10.8 billion).
Trade between China and Southeast Asia has been increasing, with bilateral trade reaching about 4.34 trillion yuan (approximately $640 billion) in the first half of 2026, marking an 18.2 percent year-on-year increase. The Beibu Gulf Port's container-handling capacity has also expanded significantly, from 2.28 million TEUs in 2017 to 10.06 million TEUs in 2025.
Guangxi is developing the Pinglu Canal Economic Belt to attract industries along the corridor, focusing on sectors such as non-ferrous metals, green chemicals, artificial intelligence, and information technology. The canal will enable direct commercial sailings to ports in Vietnam, starting with Can Tho.
A tiered transit-fee system has been implemented, allowing commercial vessels to pass through the canal free of charge until December 31, 2026, after which a nominal fee will be introduced. The canal also allows for seamless transitions from river to sea transport, enhancing logistical efficiency.
The construction of the canal required the relocation of 2,764 households, totaling 11,228 individuals, across four counties in Guangxi. The resettlement process involved designing housing models that respected residents' customs and providing job opportunities and vocational training for those affected. Despite the challenges, some residents express hope for the future, viewing the canal as a pathway to better prospects.
The Pinglu Canal represents China's effort to create alternative trade routes and reduce dependency on traditional maritime pathways, aligning with global trends to diversify supply chains.