Photo taken on August 19, 2026, showing the urban area of Qinzhou, Guangxi, and the Pinglu Canal flowing through it. (Source: Xinhua)

The Pinglu Canal, a key component of China's New International Land-Sea Trade Corridor in western China, opened to navigation on September 16. This waterway connects inland Guangxi to the Beibu Gulf, potentially revolutionizing logistics routes in southwest China and making Hainan more accessible to the regional and ASEAN markets.

For Hainan, the Pinglu Canal's primary importance is its role in enhancing connectivity. Since island-wide special customs operations began, the Hainan Free Trade Port (FTP) has implemented open policies, including zero tariffs and tariff exemptions for in-province value-added processing, enhancing its position in cross-border trade with ASEAN. However, as an island economy, Hainan FTP requires a broader economic hinterland to fully capitalize on these policies.

The opening of the Pinglu Canal creates a waterway linking inland Guangxi to the Beibu Gulf, where Hainan's Yangpu Port is located. The province can now leverage this link to build a logistics network that connects it more efficiently with southwest China.

Pei Guangyi, a council member of the National Society of Economic Geography and a professor at Hainan Normal University, said the Pinglu Canal will transform the logistics network of the New International Land-Sea Trade Corridor and create significant opportunities for the Hainan FTP. He noted that the canal's boosted cargo flows, along with the FTP's open policies, could generate a multiplier effect.

A Panama-registered container ship sails upstream along the Pinglu Canal on September 7. (Source: Xinhua)

The connection works both ways. Goods from southwest China can be shipped via the Pinglu Canal and Yangpu Port to ASEAN markets. Export tax rebates at departure ports help companies recover cash faster. ASEAN goods can also undergo bonded processing in Yangpu before being transported back through the canal to inland southwest China, reducing distribution and logistics costs.

This dynamic will ensure that Yangpu Port can support not just the local Hainan market but also establish itself as a key node in the trade network connecting southwest China with ASEAN.

Yangpu Port and Beibu Gulf Port have initiated multiple cooperation projects. Official data indicates they now operate over 10 container shipping routes and handled 353,000 TEUs in 2025. Their services include transporting domestic and foreign trade cargo on a single vessel and directly supplying bonded fuel across customs areas.

The opening of the Pinglu Canal is expected to further strengthen links between the two ports. Li Guanjie, deputy general manager of the Bonded Business Division at Sinopec China Marine Bunker Co., Ltd., said that once the Pinglu Canal opens, cargo volumes between the Beibu Gulf region and ASEAN ports are likely to increase significantly. He also noted potential growth in bonded fuel bunkering. The company is enhancing its capacity to facilitate direct cross-customs-area supply of bonded fuel from Hainan to Guangxi.

A drone photo taken on September 3 showing the Qinzhou Port Area of the Beibu Gulf Port in Qinzhou, Guangxi. (Source: Xinhua)

Alterations in logistics routes may open up new market opportunities for warehousing and processing companies in Yangpu. Yangpu's Tianyou Asphalt boasts one of Hainan's largest storage capacities for specialized asphalt. Zhao Bo, assistant general manager of Yangpu Tianyou Asphalt Development Co., Ltd., noted that improved logistics would enable the company to better use Yangpu's distribution network by storing bonded asphalt from Southeast Asia, the Middle East, and other regions. This arrangement would allow flexible, demand-driven distribution, supporting the southwest China market.

In April this year, Hainan and Guangxi reached an agreement to develop a logistics corridor connecting Yangpu Port, Beibu Gulf Port, and Pinglu Canal.

For Hainan, the corridor represents more than just an additional transport route. It could expand Yangpu Port's economic hinterland, connect the Hainan FTP's open policies with the vast market of southwest China, and provide new logistics support to strengthen Hainan's participation in China-ASEAN economic and trade activities.

A canal in Guangxi. A port in Hainan. As the two are connected through the logistics network, Hainan could find itself closer to southwest China and ASEAN markets.