Power Corridor: China’s International

Thanks to the new international land-sea trade corridor, trade and economic cooperation between inland China and Southeast Asia is growing rapidly.

China’s new International Land-Sea Trade Corridor (new ILSTC) is a key component of the Belt and Road Initiative (BRI), linking western inland areas with global sea routes and – hopefully – increasing connectivity with ASEAN countries.

Last year was a very, very good year for New ILSTC. And this momentum is expected to continue in 2026 as well.

The corridor’s rail-sea services handle 1.425 million TEU of cargo in 2025. This is up 47.6% year-on-year and exceeded 1 million tonnes for the first time with shipments from about 1,300 to 1,316 categories, including electronics, vehicles, auto parts and machinery. Combined imports and exports through the new ILSTC reached 1.35 trillion yuan ($196 billion) in trade value between January and October last year, up 17.9% year-on-year.

“Trade between China and ASEAN has grown since 2017, when the new International Land-Sea Corridor was introduced, with ASEAN’s share of China’s exports rising from 12.4% to 17.6% in 2025,” says Lin Song, chief economist for Greater China at ING in Hong Kong. “It seems there are local plans to continue expanding these logistics channels, which should continue to contribute to overall trade growth between China and ASEAN.”

From Beijing’s perspective, trade growth in the first two months of this year was nothing short of spectacular.

Shipments from China to Southeast Asia rose 29.4% in dollar terms in January and February. Overall Chinese exports rose 21.8% during that period, defying a Reuters poll of economists in December that had predicted 7.1% export growth. Sugar imports also increased overall by 19.8% during the same period. But China still posted a record trade surplus of $213.6 billion in 2025, a 25.3% gain over the same period: a year when the country’s trade surplus reached an all-time high of $1.2 trillion.

“The share of exports from China in ASEAN economies is set to grow from about 5.5% in 2000 to more than 15% in 2024,” says Professor Christophe Nedopil-Wang, who recently became a professor at the University of Queensland Business School and head of its Center on APAC Industry Transitions. “However, there was no critical breaking point: rather, it was a general increase in line with the overall growth of ASEAN economies. Meanwhile, imports from ASEAN countries have stagnated at about 15% of China’s total imports over the past five years. Chongqing is still relatively small, handling about 251,800 TEUs or only 0.5% of Shanghai’s 55 million TEUs.”

This is expected to change as the Guangxi Pinglu Canal opens to 5,000-ton vessels later this year, providing river-sea access from inland centers to southern ports and ASEAN countries.

“Once the Pinglu Canal, with its 89 million tonne annual capacity, is opened in late 2026, China’s southwestern inland provinces will be better connected to ASEAN economies by reducing transportation time from weeks to weeks,” says Nedopil-Wang.

The latter was established in 2015 to increase connectivity between the two countries and between landlocked western China and ASEAN. Last December, relations grew closer when Singapore’s Infocomm Media Development Authority and China’s National Data Administration signed a memorandum of understanding for a Digital New ILSTC focusing on AI, blockchain, data analytics and digital economy cooperation. The same month, the People’s Bank of China gave a further boost to the New ILSTC when it outlined financial support measures aimed at expanding supply chain finance and infrastructure funding for the project, encouraging the use of the digital renminbi for settlements, and broadening intra-Asian trade.

“The land-sea corridor will likely further strengthen opportunities for China’s exporters,” Nedopil-Wang believes. “But the extent to which ASEAN members will benefit from improved export opportunities to China through the corridor depends on their ability to provide attractive industrial or consumer goods relevant to China’s south-western regions.”