China has struck the first inter-governmental agreement with Laos to cooperate on a cross-border railway service.

The China-Laos railway is set to be launched later this week and will cover a distance of about 1,035km.

China’s national railway authority stated that the agreement will establish a legal framework for cross-border transportation of people and goods.

The deal was signed virtually between the officials of China’s National Railway Administration (NRA) and Laos’ Ministry of Public Works and Transport.

Construction of the railway, which spans from Kunming in Southwest China’s Yunnan Province to the capital of Laos, Vientiane, was initiated in December 2016.

The Chinese Academy of Social Sciences the Centre for Southeast Asian Studies director Xu Liping was quoted by Global Times as saying: “The agreement would mitigate inconsistencies in the ways that the railway operators of the two countries manage the line, and the agreement is of fundamental importance to the smooth operation of the railway.”

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By GlobalData

During the initial phase of operation, the railway is mostly expected to carry cargo.

Eventually, the electrified passenger and cargo railway will be merged with rail lines running in Thailand, Malaysia, and Singapore.

With a speed of 160km/hr, the route will reduce the travel time from Vientiane to the China-Laos border to three hours instead of two days while the journey to Kunming will be covered overnight, reported Xinhua News Agency.

As per a World Bank report published in 2020, the railway will also link Laos with the entire Belt and Road Initiative network.

Additionally, the new route is expected to minimise transport expenses and enhance trade activities between both nations to 3.7 million tonnes by 2030.

In July this year, China launched a high-speed maglev train that can travel at a top speed of 600km/h in Qingdao, Shandong Province.