China opens trade shortcut to SE Asia

The Pinglu Canal, designed to handle vessels of the 5,000-metric-ton class, now allows cargo to turn south and reach the Beibu Gulf — the closest maritime outlet for much of southwestern China — through the Qinzhou Port.

One of the biggest engineering challenges during construction of the canal was navigating a difference of 65 meters in the water level between its northern end and the sea. Three navigation hubs — Madao, Qishi and Qingnian — featuring twin-line ship locks were built to raise and lower vessels, effectively acting as giant elevators.

Ni Yuping, vice-dean of Tsinghua University's School of Humanities in Beijing, placed the megaproject in a broader context, saying that one of the key questions it seeks to answer is "how western China can better integrate into the global economy".

Unlike the Suez Canal and the Panama Canal, which primarily provide shortcuts for vessels between major seas and oceans, the Pinglu Canal gives a vast inland economic hinterland a shorter route to the coast — and from there to international markets.

Wu Tao, a history professor at Sun Yat-sen University in Guangzhou, the capital of Guangdong, noted that inland waterway shipping routes "remain irreplaceable" even though China's road, rail and air transportation networks have expanded. Their large carrying capacity and relatively low logistics costs make inland waterways particularly suited for bulk cargo, Wu said.

For businesses, the new canal is already dictating logistics and investment decisions.

On Sept 8, a consignment of auto parts from Chinese vehicle manufacturer SAIC-GM-Wuling left Liuzhou for Nanning Port, before continuing by ship through the Pinglu Canal to reach Can Tho Port in Vietnam.

The company said the new river-sea route could cut its logistics costs by about 10 percent. "For us, the freight saved is real profit, and that translates directly into greater price competitiveness in ASEAN and other global markets," said Cai Yan, a senior technical officer at SAIC-GM-Wuling.

The canal has added waterway to the company's existing road and rail transportation options, giving it more flexibility as it expands its business and production links across Southeast Asia, Cai said.

The new route is being factored into investment plans of companies.