Pinglu Canal more than a geographic shortcut

Editor's note: On Wednesday, China opened the Pinglu Canal in the Guangxi Zhuang autonomous region. The canal connects the Xijiang River shipping route with the Beibu Gulf. Zhou Yamin, a research fellow of the National Institute of International Strategy at the Chinese Academy of Social Sciences, spoke to China Central Television on the significance of the canal. Below are excerpts of the interview. The views don't necessarily represent those of China Daily.

The opening of the Pinglu Canal turns the autonomous region into a crucial node in the regional transport network. Even though Guangxi has a coastline and is located on China's border, these geographical advantages have not been fully leveraged until now. The opening of the canal will lead to three major shifts.

First, the relationship between Nanning and the Beibu Gulf Port, a port that comprises three individual ports located in the coastal cities of Beihai, Qinzhou and Fangchenggang and serves as a transit point for interconnectivity between China and Southeast Asia, will undergo a transformation. With the opening of the canal the inland river ports and the seaports will no longer operate as two separate systems, but will integrate into a unified cargo sourcing network.

Second, industries related to waterborne bulk commodities, machinery, equipment, grain and oil are expected to cluster along the banks of the canal.

Third, Guangxi's position in the regional economic landscape will rise substantially. The canal increases its capacity to attract industries relocating from the Guangdong-Hong Kong-Macao Greater Bay Area and strengthens its role in industrial production for the Association of Southeast Asian Nations.

As a vital link in the China-ASEAN multi-modal transport network, which combines high-speed rail, expressways and waterways, the canal can accommodate vessels of up to 5,000 metric tons, greatly boosting the efficiency of long-distance transportation of grain, oil products, bulk goods, machinery and daily consumer goods.

Via the canal, Chinese machinery and equipment can reach the ASEAN region faster, while agricultural produce, bulk commodities and critical minerals from ASEAN can be shipped more rapidly to China's southwest for processing. This will further energize economic and trade ties between China and ASEAN.

China-ASEAN trade ties have historically been predominantly trade-based, focusing on agricultural and industrial goods exchange. The opening of the canal will likely increase the flow of intermediate and processed goods, thus turning China and ASEAN from trading partners into production partners. This profound shift will significantly advance regional economic integration.

For Southwest China as a whole, the Pinglu Canal will transform its economic geography, prompting changes in the region's industrial structure and significantly improving local employment, living standards and a wide array of services. It is expected to reshape the industrial landscape in the region, enabling cities to expand their processing, logistics, subcontracting and trade settlement businesses.

As the canal continues to develop and production activities increase, ancillary service industries may emerge. For instance, the scenic beauty along the canal has already attracted widespread interest, which will help drive traditional services such as tourism, accommodation and catering.

At the same time, production-related services, including financial services tailored for small and medium-sized enterprises, renminbi settlement and currency swap arrangements, are also expected to flourish.

We also envision the canal fostering enhanced cooperation between China and ASEAN for joint exploration of third-party markets.