With 134 kilometers long in Guangxi, Pinglu Canal promises to drastically reduce navigation time
The company began navigation tests on the Pinglu Canal, a US$10 billion, 134-kilometer-long project in the south of the country. The expectation is to drastically reduce maritime transport times to Southeast Asia after the inauguration, scheduled for September.
The Pinglu Canal connects the Xijiang River to the Beibu Gulf in the Guangxi Autonomous Region and creates a direct maritime link to southwest China.
The megaproject is at the forefront of a broader wave of and adds to analysts’ concerns about the risks of rising local government debt.
Previously, cargo from the southwest had to travel hundreds of kilometers further east, passing through Guangzhou, to reach the ocean. The new waterway eliminates this detour and shortens the route by more than 560 kilometers. As a result, the transportation time for agricultural exports to Southeast Asian markets will fall from around 15 days to less than 3 days.
Local authorities estimate that the canal will move 108 million tons of cargo per year by 2035, mainly coal, minerals and agricultural products. According to them, the infrastructure should also reduce logistical costs and attract industrial hubs to cities along the route.
The project cost around US$10.7 billion, equivalent to more than US$79 million per kilometer. Central and regional governments pay half of the amount. The remainder will be financed by special purpose bonds, corporate capital and bank loans administered by the .
Despite the high cost and environmental impacts — which required the relocation of almost 10,000 adult mangroves —, the project stimulated a rush for infrastructure works across the country.
Inland provinces, such as Hunan and Jiangxi, are articulating their own billion-dollar waterway projects to boost regional growth.
The expansion of canal projects worries transport researchers, who estimate that the need for large investments could increase the debt of local governments.
Zhao Yifei, an associate professor at Shanghai Jiao Tong University, said local governments should not overestimate the economic benefits of the canals. According to the researcher, obtaining economic returns depends on industrial planning and not just the construction of infrastructure.
This report was originally in English by Caixin Global on June 9, 2026. It was translated and republished by Poder360 under mutual content sharing agreement.
