ASEAN

Thanks to the New International Land-Sea Trade Corridor, trade and economic cooperation between inland China and Southeast Asia are growing fast.

China’s New International Land-Sea Trade Corridor (New ILSTC) is a critical component of the Belt and Road Initiative (BRI), linking the western inland regions to global maritime routes and—it is hoped—enhancing connectivity with ASEAN countries.

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

The corridor’s rail-sea services handled 1.425 million TEUs of cargo in 2025. That’s up 47.6% year-on-year and surpassing 1 million tons for the first time with some 1,300 to 1,316 categories shipped, including electronics, vehicles, auto parts, and machinery. Trade value between January and October of last year saw combined imports and exports via the New ILSTC reach 1.35 trillion yuan ($196 billion), up 17.9% year-on-year.

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

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

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

“The share of exports from China to ASEAN economies has steadily grown from around 5.5% in 2000 to more than 15% in 2024,” says Professor Christoph Nedopil Wang, director of the Griffith Asia Institute at Griffith University in Brisbane. “However, there was no significant breaking point: rather, it was a general growth in line with the ASEAN economies’ overall growth. Imports from ASEAN countries, meanwhile, have stagnated over the past five years at around 15% of total imports to China.Chongqing is still relatively small, handling about 251,800 TEU or only 0.5% of Shanghai’s 55 million TEU.”

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

“Once the Pinglu Canal is opened at the end of 2026, with its 89 million tons annual capacity, Chinese southwestern inland provinces will be better connected to ASEAN economies by reducing transport times from weeks to days, says Nedopil-Wang. “Furthermore, several ASEAN countries, such as Singapore or Malaysia, could identify new opportunities to fill existing agreements with live programs, such as the Singapore-Chongqing Connectivity project.”

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

“The Land-Sea corridor is likely further strengthening opportunities for China’s exporters,” observes Nedopil-Wang. “But to what extent 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 the southwestern regions of China.”