Testing the waters? Businesses weigh China’s new trade shortcut to Southeast Asia
China's new Pinglu Canal offers inland businesses a cheaper trade route to Southeast Asia, but its long-term commercial viability and cost savings remain to be proven.
NANNING, Guangxi: For one liftmaker in China’s landlocked southwest, getting its products to the coast can cost almost as much as shipping them abroad.
China Aviation Guizhou Elevator exports to Malaysia from its factory in Zunyi, Guizhou. Because the factory is far inland, around 800km by road from Qinzhou Port, each lift must first be transported overland to a seaport.
Simply getting its products to Qinzhou or Shanghai costs 2,000 to 3,000 yuan (US$300 to US$450) more than what manufacturers based in port cities pay.
“That weakens the price competitiveness of our products,” Xu Renyin, 36, who oversees the company’s foreign trade business, told CNA.
“It is a major pain point for inland companies trying to go overseas.”
A new 72.7 billion yuan canal is aimed at narrowing that disadvantage.
The Pinglu Canal, which opened in Guangxi on after four years of construction, gives inland southwest China a new water route through Qinzhou port to the South China Sea and Southeast Asia.
It cuts more than 560km off the existing river journey through Guangdong and will reduce transport costs by 18 to 30 per cent, generating annual savings of more than 5 billion yuan, according to state media.
https://www.channelnewsasia.com/east-asia/pinglu-canal-asean-business-china-guangxi-6397476
