China Opens $10 Billion Pinglu Canal to Southeast Asia

China inaugurated the Pinglu Canal on September 16, its first river-to-sea canal since 1949, cutting hundreds of miles off shipping routes to Southeast Asia.

Beijing officially opened the Pinglu Canal on Wednesday, September 16, 2026, connecting the Xijiang River with the Gulf of Tonkin in the South China Sea. The 83-mile (134-kilometer) waterway, under construction since 2022, is the first canal of its kind built in China since the founding of the People's Republic in 1949, giving landlocked areas of the country's southwest direct access to the sea. It can accommodate vessels of up to 5,000 tons, which can sail from the river directly to berths at Qinzhou seaport without transferring cargo to another ship.

The canal is billed as a landmark win for Xi Jinping's Belt and Road Initiative and its New International Land-Sea Trade Corridor. According to Al Jazeera, citing Guangxi authorities, the waterway shortens shipping distances between inland southwest China and Southeast Asia by about 560 kilometers (350 miles) and reduces logistics costs by 18 to 30 percent. Guangxi deputy secretary-general Zhang Zhiwen estimated transport costs alone will fall by more than 5 billion yuan (about $700 million) annually, per Al Jazeera. Goods such as coal, ore, grain, new-energy materials and auto parts now take a more direct route to overseas markets, the Chinese government said in a statement cited by the Washington Examiner.

The construction price comes with competing estimates. Beyond the canal itself, Guangxi is promoting a so-called 'Pinglu Canal Economic Belt' targeting non-ferrous metals, critical minerals, green chemicals and information technology, according to Al Jazeera. Container capacity at Beibu Gulf Port, at the canal's southern end, rose from 2.28 million TEUs in 2017 to 10.06 million in 2025, Al Jazeera reports.

Construction required relocating thousands of families. Al Jazeera reports the resettlement covered 2,764 households comprising 11,228 people across four counties in Guangxi, with 368 homes demolished in Hengzhou alone. Officials designed 21 different housing models to match residents' customs, and the largest resettlement town, Shaping, received four-storey homes with commercial storefronts. The process was completed within 39 days and tied to promises of construction jobs and vocational training, though one displaced resident in Xinfu noted there is 'no longer a village called Fenghuangping.'

The canal strengthens links to the Association of Southeast Asian Nations, China's largest trading partner as a bloc. Muslim Network TV reports China-ASEAN bilateral trade reached $1.05 trillion last year, and Al Jazeera cites customs data putting first-half 2026 trade at about $640 billion, up 18.2 percent year on year. The Washington Examiner notes the United States and its allies have long cautioned against Belt and Road cooperation, calling it an expansion of Chinese soft power, while the Center for Global Development describes the initiative's trajectory as a 'transition from financier to debt collector.'

Commercial vessels will pass through the canal's three water gates free of charge until December 31, 2026, after which a trial fee of one yuan (about $0.14) per tonne of vessel capacity applies until September 2031, according to Al Jazeera. Direct commercial sailings are scheduled to begin from the canal to Can Tho port in southern Vietnam. Beijing is meanwhile expected to push for a Free Trade Area of the Asia-Pacific when it hosts Apec in November, a bid analysts tell the South China Morning Post is unlikely to succeed given US resistance, but which could cast Washington as the obstacle to regional trade.