Newly opened Pinglu Canal to enhance Malaysia-China, Asean trade connectivity

KUALA LUMPUR: The opening of China's Pinglu Canal on Sept 16 could further enhance trade connectivity between Malaysia, China and the wider Asean region.

The 134.2km waterway, built at a cost of 72.7 billion yuan, shortens the inland route goods from southwest China take to the sea by more than 560km.

The canal is also expected to reduce logistics costs by between 18 and 30 per cent, potentially saving more than five billion yuan in annual transportation expenses.

CGTN reporter Xu Hua shared this during the Bernama World programme on Monday, speaking virtually on "China-Asean Expo (CAEXPO) 2026: Malaysia, China & The Future of Asean Trade".

Xu Hua said the canal could provide Malaysian exporters, particularly those dealing in palm oil, electronics and halal products, with faster, cheaper access to China's western inland markets through Qinzhou Port.

Combined with the China-Laos Railway and Beibu Gulf ports, the canal would form part of a north-to-south logistics network strengthening regional trade connectivity.

The Pinglu Canal, in China's Guangxi Zhuang Autonomous Region, links the Xijiang River system with the Beibu Gulf and gives southwest China a more direct route to maritime markets.

The waterway forms part of the New International Land-Sea Trade Corridor, which connects inland areas of western China with Asean and other international markets.

On the China-Asean Free Trade Area (CAFTA) 3.0 upgrade, Xu Hua said the agreement represented a fundamental shift in economic cooperation, moving beyond conventional trade in goods toward digital economy development, green industries, and stronger regional supply chains.

"Actually, the China-Asean Free Trade Area 3.0 represents a fundamental shift from buying and selling to co-building," she said.

She said the transition was already evident at the 23rd China-Asean Expo (CAEXPO), with dedicated digital economy and green low-carbon pavilions, AI-driven business matchmaking, and growing cooperation between Chinese energy companies and Asean countries, including Malaysia.

The five-day CAEXPO, held in Nanning until Sept 21, placed greater emphasis on economic and trade cooperation, artificial intelligence and enterprise participation.

The annual expo serves as a platform for promoting trade and investment cooperation between China and Asean.

This, she said, demonstrated that both sides were increasingly moving towards integrated production and supply chains rather than merely exchanging finished goods.

The China-Asean Free Trade Area was established in 2002, with the first version completed in 2010 and the second upgrade completed in 2015.

Negotiations for the 3.0 upgrade began in 2022 and were fully concluded in May 2025.

The upgrade covers areas including the digital economy, green economy, supply chain connectivity, competition and consumer protection, and micro, small and medium enterprises.

"The 3.0 era is not just about lowering tariffs. It is about building a shared digital and green future for China and Asean," she added.