China to build land-based 'Suez Canal' to connect Europe and Asia, bypassing shipping routes

The mountainous city of Chongqing in China has become a major hub for an overland trade route that some say could become the new Suez Canal.

The route is served by rail, and is expected to become Asia's most important logistics hub.

The South China Morning Post said the city has quickly emerged as a strategic fulcrum in China's trade network, and its model—if it continues to succeed—could inspire the government to go for similar investments in the west of the country.

Every day, the city manages hundreds of shipments, connecting Southeast Asian countries such as Vietnam and Singapore to Europe, including Germany and Poland, using high-speed freight trains.

Short shipping time

The delivery time over land is 10-20 days shorter than traditional sea routes, and considerably simplifies customs issues. The launch of the ASEAN bullet train in 2023 cut the shipping time between Hanoi and Chongqing to just five days, from which goods will reach Europe in less than two weeks.

In addition to its strategic location, Chongqing is a major production powerhouse, responsible for manufacturing about a third of the world's laptops, a major base for the production of electric cars, and a major export centre for a quarter of China's cars.

Geopolitical dimensions

Some observers believe that China's motives for using this city do not only have logistical dimensions, but also have geopolitical dimensions. The trade war with the United States under President Donald Trump has shown the danger of relying on international sea lanes under Western influence such as the Suez Canal and the Straits of Hormuz and Malacca. The coronavirus pandemic exacerbated the risks, exposing the fragility of maritime supply chains.

With the ongoing war in Ukraine and some Chinese shipments subject to seizure in 2023, passing through Russia has become more risky, even though bilateral trade between the two countries reached 240 billion euros in 2024. Therefore, Beijing is pushing for the development of a "Middle Corridor" through Kazakhstan and the Caspian Sea to avoid Russia and the sea straits.

However, Beijing faces many challenges in terms of customs delays, high costs, poor infrastructure, and financial sustainability. Many routes, especially within the Belt and Road Initiative, have relied on government subsidies to make them easier for exporters.