China is shifting its focus from modern transport infrastructure to traditional canals as a means of expanding its influence across Asia.

By Richard Spencer for The Times

In Brief by Probe International

China has shifted its infrastructure focus from building the world’s largest motorway network and two-thirds of global high-speed railways to reviving canals as a cost-effective mode of transport.

This pivot reflects a strategic adaptation amid growing East-West divisions, particularly as U.S. policies under successive administrations reduced reliance on Chinese imports. Historically, China’s roads and rails funneled goods and workers from the interior to eastern ports for export to Western markets. Now, Beijing emphasizes cheaper, freight-oriented waterways to redirect trade flows southward, reviving ancient ties with Southeast Asian neighbors such as Vietnam, Malaysia, and Thailand through infrastructure-led development.

The centerpiece of this initiative is the Pinglu Canal, an 83-mile waterway linking Nanning to the Gulf of Tonkin, set to be completed by the end of the year. This project is designed to transform Nanning into a crucial hub for connecting China’s poorer inland provinces to international shipping lanes and booming Southeast Asian markets, which have become China’s largest trading partner, surpassing the U.S. Unlike passenger-focused high-speed rail, canals excel at low-cost freight, addressing long-standing regional inequalities by making inland areas more competitive for investment and trade.

This “canal diplomacy” extends China’s influence in Asia as part of broader initiatives like the Belt and Road, deepening economic interdependence with ASEAN amid U.S.-China tensions. It builds on modernizing the historic Grand Canal, which connects major rivers nationwide, and includes considerations for extensions like the Xianggui Canal to create vast north-south waterway networks. By providing access to growing regional markets, these projects aim to strengthen strategic and commercial bonds, echoing historical tributary relationships while countering Western decoupling efforts.

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