Singaporean Senior Minister Lee Hsien Loong examines a model of the Qinzhou Automated Container Terminal of Beibu Gulf Port, China’s first automated container terminal for sea-rail transportation, in Nanning, China, May 19, 2026.
Singapore’s Senior Minister Lee Hsien Loong flew into Nanning on May 18, accompanied by officials from the ministries of finance, foreign affairs, digital development, and manpower, for a visit that was described in media reports as an effort to “deepen Singapore’s ties with China at the regional level.”
In addition to meeting Guangxi Communist Party chief Chen Gang, Lee made site visits to Nanning, the southern gateway of the New International Land-Sea Trade Corridor (ILSTC). The ILSTC is a multimodal freight corridor, spanning rail, road, and sea, and running from Chongqing in western China southwest through Guangxi to Qinzhou Port on the Beibu Gulf, then by container ship to Singapore and onward to ASEAN and global markets.
Thirteen provincial-level regions in western China, including Chongqing, Sichuan, Guizhou, Yunnan, Gansu, and Xinjiang, are participating in ILSTC alongside Singapore, which serves as the transshipment hub at the corridor’s southern end. The institutional anchor of the ILSTC is the China-Singapore (Chongqing) Connectivity Initiative (CCI), Singapore’s third government-to-government project with China, under which Singapore and Chongqing serve as the corridor’s dual hubs.
During his visit, Lee was effectively walking through the arteries of a logistics architecture that Singapore helped design – and that China cannot afford to see disrupted.
Lee Kuan Yew once said that “reunification between Taiwan and the Mainland is a matter of time,” treating it as an immovable structural reality in the Asian order rather than a problem that diplomacy would permanently resolve.
U.S. President Donald Trump’s visit to Beijing last week may have lowered the temperature briefly, but it changes nothing fundamental. For Beijing, Taiwan’s reunification is an historical obligation. At the same time, Washington’s commitment to arm Taipei remains institutionally embedded. As a result, this U.S.-China faultline is set to endure.
But what could a Taiwan contingency – a blockade or kinetic conflict – do to China’s economy?
In a recent assessment, the Center for Strategic and International Studies reported that about $2.45 trillion in goods transited the Taiwan Strait in 2022 – over one-fifth of global maritime trade. Of that, $1.4 trillion was Chinese imports and exports. China depends on the strait for nearly one-third of its oil, coal, gas, and industrial ore imports. More importantly, over half of all voyages through the strait are Chinese domestic inter‑port movements. As a result, any disruption in the strait would have a serious impact on Chinese supply chains.
Russia’s war in Ukraine showed what happens when a major power fights a protracted conflict without a war-footed economy and resilient logistics networks. And in the context of a Taiwan crisis, China’s main arteries of maritime trade through the East and South China seas would likely be severely impacted.
What remains is the Eurasian Land Bridge from Chongqing through Central Asia to Europe, and Manchurian rail routes into Russia. Both are important, but neither is sufficient as a standalone replacement for maritime volume in wartime. The China-Europe rail corridor is slow, energy‑intensive, and runs through Russian territory, while the nascent China-Kyrgyzstan-Uzbekistan route is unproven in terms of capacity and political reliability. Manchuria’s northern routes also depend on Moscow’s cooperation over a multi‑year conflict. Hence, the need for a southern maritime alternative.
The ILSTC begins in Chongqing in China’s southwest. During World War II, the city served as China’s wartime capital, its inland geography and distance from the coast making it relatively resistant to Japanese naval and air power. Today, Chongqing produces roughly one‑third of the world’s laptops and is a major electric vehicle and automobile hub. Its industrial mass is inland. In a contingency, that economic output would be forced to move southwest rather than eastward toward the coast. And the ILSTC does precisely that, creating a trade route running from Chongqing to Qinzhou port in Guangxi, away from the Taiwan Strait, the East China Sea, and the exposed coastal port cities.
At the coast sits Qinzhou Port, the Beibu Gulf Port Group’s main container hub. Together with Fangchenggang and Beihai – all three ports are situated on Guangxi’s Beibu Gulf coast – it handled 10 million TEUs (Twenty-foot Equivalent Units) in 2025, with ILSTC shipments exceeding 1.4 million TEUs and corridor throughput growing 50 percent year‑on‑year since the 2017 pilot.
Added to this is the Pinglu Canal, which Lee also inspected during his recent visit to Nanning. Construction is three months ahead of schedule, with trial voyages expected from July this year, and a commercial opening at the China-ASEAN Expo in September. The 134‑kilometer, approximately $10 billion waterway runs from the Xijin Reservoir in Guangxi to the Beibu Gulf near Qinzhou, bypassing the Pearl River Delta and Guangdong. It cuts 560 kilometers off the route from Nanning to the open sea, reduces the distance between Nanning and Singapore by up to 740 kilometers, and is projected to save about $730 million in logistics costs annually once at full capacity. Crucially, the canal plugs into the Xijiang inland waterway network, reaching west into Yunnan and Guizhou. For the first time, these provinces will gain direct sea access to ASEAN markets without touching the western Pacific or the Taiwan Strait.
Working in China’s favor is the fact that the Beibu Gulf – or Gulf of Tonkin – is not an open, unprotected sea. To its east lies Hainan Island, home to the Yulin Naval Base at Sanya, China’s primary submarine base in the South China Sea.
Any attempt to interdict cargo in the Beibu Gulf, therefore, faces a very different risk calculus from doing so in the open South China Sea or the Taiwan Strait, enabling Beijing to cast a credible deterrent umbrella over the area.
Beijing also understands that securing this gulf requires keeping Vietnam on its side. Unlike the South China Sea, where China’s nine-dash line claims remain fiercely contested by Hanoi, the Gulf of Tonkin has a settled maritime boundary, agreed in December 2000 and in force since 2004, covering both countries’ territorial seas, exclusive economic zones, and continental shelves. In March 2026, the Chinese and Vietnamese navies completed their 40th joint patrol in these waters. Taken together, Beijing is managing Hanoi bilaterally so Vietnam does not become a hostile chokepoint on the corridor’s southern leg.
Aside from Vietnam, ASEAN’s littoral states are the other decisive variable in China’s ILSTC calculus.
China’s expansive claims in the South China Sea – and the 2016 arbitral ruling that found most of these were invalid under the U.N. Convention on the Law of the Sea (UNCLOS) – are well known. Yet in the present configuration, Beijing has a strong interest in ASEAN defending UNCLOS at the Strait of Malacca.
Singapore’s Foreign Minister Vivian Balakrishnan has stressed that Singapore, Malaysia, and Indonesia are “strategically aligned” in keeping the Strait of Malacca open, operating on the basis of UNCLOS, with transit passage guaranteed to all. For Beijing, an UNCLOS‑compliant, non‑aligned Malacca is precisely what keeps the ILSTC’s terminal leg open – even if it will never say so aloud.
