NANNING: Trade between South-East Asia and China will be given a boost in September when a 134.2km, $13.7 billion man-made canal opens in the Guangxi autonomous region, connecting China’s inland rivers directly with the South China Sea.
The Pinglu Canal will reduce the distance needed to ship goods from China’s inner western provinces to Singapore by up to 740km. Its completion comes at a time when trade between South-East Asia and China has boomed despite global tensions.
The canal, built by China, starts near Hengzhou, in Guangxi’s capital Nanning, and ends at the region’s Beibu Gulf port.
Traffic through the canal will feed into the New International Land-Sea Trade Corridor (ILSTC), a trade and logistics passage conceptualised by Singapore and China in 2015 as part of the Chongqing Connectivity Initiative (CCI), a bilateral project, and championed by Senior Minister Lee Hsien Loong, who was then prime minister, and Chinese President Xi Jinping.
More than a decade later, SM Lee was in Nanning on May 18 to learn about the progress of the ILSTC and the impact that the Pinglu Canal will have on China-Asean trade.
Speaking with Guangxi government chairman Wei Tao during a visit to the headquarters of the state-owned Beibu Gulf International Port Group, SM Lee said he was happy to see the progress of the ILSTC in person.
“The original idea on paper looked very sensible – that China has a lot of development potential in the western provinces, and that the connection to the outside world, all the way to Chang Jiang (Yangtze River), to Shanghai, was a very long journey.
“So the faster way would be through Guangxi, through Beibu Gulf, and out to South-East Asia, to North-East Asia, or the rest of the world,” SM Lee said.
“After a lot of work by the Chinese side and by Singapore partners too, I am very happy to see that the project has been very successful,” he added. He said he was confident that the Beibu Gulf port in Guangxi will continue to grow once the Pinglu Canal is completed.
SM Lee also said the world is in a very unsettled state today and international trade has been affected by the many troubles around the globe.
“It is all the more necessary for countries to work together, to cooperate, and to promote economic integration and trade and investments with one another, because that is the way we can improve the lives of our people,” he added.
In 2025, amid a bruising tit-for-tat trade war between China and the United States and US President Donald Trump’s Liberation Day tariffs, two-way trade between China and ASEAN grew to US$1 trillion (S$1.28 trillion), up from US$772.4 billion in 2024.
Guangxi’s Beibu Gulf, better known as the Gulf of Tonkin outside of China, served as a key gateway for this trade.
Container throughput at Beibu Gulf’s port reached the equivalent of 10 million 20-ft shipping containers in 2025 – up from about five million in 2020 and slightly over one million in 2013 – placing it among China’s top 10 busiest ports.
Goods that pass through the southern tip of Guangxi include electric vehicles and consumer goods from China and iron ore and durians from South-east Asia.
Wei, who described SM Lee as an “old friend” to the Chinese and Guangxi people, lauded the transformational effect this has had on the autonomous region, which was previously on the periphery of China’s rapid but uneven economic boom.
Since its launch in 2015, the CCI has been seen as an important platform that supports Guangxi’s development as it channels trade from China’s western provinces like Sichuan, Guizhou and Yunnan to the autonomous region through multiple transport modes, including road and rail.
“In the blink of an eye, through these years of development, we have become the frontier and window for China and Asean's opening up and development,” said Wei, who was formerly the chairman and general manager of Beibu Gulf International Port Group.
He said on May 18 that there is still much room for cooperation between Singapore and Guangxi, whether in shipping, logistics, green development or the digital economy.
This is especially so with the addition of the Pinglu Canal. “From seaports to the canal, to inland ports, and even lake ports in the south-western hinterland, I hope we can cooperate by leveraging Singapore’s world-leading technological advantages in this industry in future,” he added.
Beibu Gulf International Port Group deputy general manager Zhou Yan said the canal could add an estimated 3.5 million tonnes of cargo throughput when it opens. In the long term, this could grow to 150 million tonnes annually.
SM Lee’s visit to Nanning marks the start of his five-day trip to China that will also take him to Shanghai.
Accompanied by Senior Parliamentary Secretary for Finance and Manpower Shawn Huang and Jalan Besar GRC MP Wan Rizal, SM Lee is slated to meet Guangxi party secretary Chen Gang while in Nanning.
In Shanghai, SM Lee will speak at the closed-door J.P. Morgan Global China Summit. He will also meet the city’s mayor, Gong Zheng, and visit companies there to learn about broader technological developments in China.
The Prime Minister’s Office said in a statement on May 17 that SM Lee’s visit builds on the momentum of recent high-level exchanges between Singapore and China.
SM Lee last visited Guangxi in September 2014 to attend the annual China-Asean Expo. He was last in Shanghai in November 2024. - The Straits Times/ANN
