Trade and economic collaboration between inland China and Southeast Asia is rapidly advancing, bolstered by the New International Land-Sea Trade Corridor (New ILSTC). This corridor serves as a pivotal element of China’s Belt and Road Initiative (BRI), connecting western inland regions to global maritime routes and aiming to enhance links with ASEAN nations.
The year 2025 marked significant growth for the New ILSTC, with expectations for this trend to continue into 2026. The corridor’s rail-sea services processed 1.425 million twenty-foot equivalent units (TEUs) of cargo last year, reflecting a year-on-year increase of 47.6% and exceeding 1 million tons for the first time. The range of categories shipped included electronics, vehicles, auto parts, and machinery, contributing to a trade value of 1.35 trillion yuan ($196 billion) between January and October, representing a 17.9% rise compared to the previous year.
Lynn Song, Chief Economist for Greater China at ING in Hong Kong, noted that trade between China and ASEAN has intensified since the New ILSTC’s inception in 2017. During this period, ASEAN’s share of China’s exports increased from 12.4% to 17.6% in 2025. There appear to be ongoing local initiatives aimed at further expanding logistics channels, which should continue to foster trade growth between China and ASEAN.
From Beijing’s standpoint, the trade expansion in early 2026 was remarkable. Shipments from China to Southeast Asia rose by 29.4% in dollar terms during January and February. Overall Chinese exports during this timeframe grew by 21.8%, exceeding a December Reuters economists’ poll prediction of 7.1% growth. Chinese imports also saw an increase, rising 19.8%, while the nation recorded a historic trade surplus of $213.6 billion—a 25.3% year-on-year gain, following a 2025 surplus of $1.2 trillion.
Professor Christoph Nedopil-Wang from the University of Queensland Business School highlighted that the proportion of exports from China to ASEAN economies has climbed from approximately 5.5% in 2000 to over 15% by 2024. This growth was steady rather than marked by a specific turning point, closely mirroring the overall economic expansion of ASEAN countries. In contrast, imports from ASEAN nations have plateaued at around 15% of China’s total imports over the past five years. For context, Chongqing currently handles about 251,800 TEUs, representing only 0.5% of Shanghai’s 55 million TEUs.
This scenario is poised to improve with the anticipated opening of the Guangxi Pinglu Canal for 5,000-ton vessels later this year. This development will facilitate river-sea access from inland hubs to southern ports and ASEAN countries.
According to Nedopil-Wang, the activation of the Pinglu Canal, which boasts an annual capacity of 89 million tons, will significantly enhance connectivity between China’s southwestern inland provinces and ASEAN economies, reducing transport times from weeks to days. Additionally, several ASEAN nations, such as Singapore and Malaysia, may discover new opportunities aligned with existing agreements, such as the Singapore-Chongqing Connectivity Project established in 2015 to improve connectivity between the two nations and landlocked western China and ASEAN.
The partnership advanced last December when Singapore’s Infocomm Media Development Authority and China’s National Data Administration signed a Memorandum of Understanding focusing on a Digital New ILSTC, emphasizing cooperation in AI, blockchain, data analytics, and the digital economy. In the same month, the People’s Bank of China expanded support for the New ILSTC, detailing financial measures to enhance supply chain finance and infrastructure funding while promoting the use of the digital renminbi for transactions and aiming to increase intra-Asian trade.
Nedopil-Wang remarked that the Land-Sea Corridor is likely to further bolster opportunities for Chinese exporters. However, the extent of benefits for ASEAN member states regarding enhanced export opportunities to China will depend on their capacity to offer competitive industrial or consumer goods appealing to the southwestern regions of China.