China has announced plans to introduce new high speed trains to connect more cities, including Hong Kong, increasing the speed limits to 300 km for the first time after a fatal train crash that led to a temporary suspension of new projects.

A new high-speed railway is scheduled to be launched tomorrow between Guangzhou and Shenzhen connecting its highly industrialised cities in south China. It will be further extended to nearby Hong Kong liking it up with the mainland.

The trains would reduce the travel time between the two cities to just 35 minutes, state-run Xinhua news agency quoted officials as saying.

A total of 36 pairs of China-made CRH3 bullet trains will travel the 102 km long distance at a maximum speed of 300 kmph, they said, with one-way ticket costing 100 yuan ($15.87) for first-class seats and 75 yuan for second-class seats.

China’s railway projects have been on a binge since the country rolled out a stimulus plan worth four trillion yuan to counter the financial crisis of 2008.

But the sector has been hit hard in the second half of 2011, after the government tightened liquidity control, and the deadly train collision eroded investor confidence and limited the ministry’s ability to borrow money or sell bonds.

The move comes as the government is planning to cut spending in railway infrastructure construction to 400 billion yuan ($62.9 billion) from 469 billion yuan this year, the Railway Minister, Mr Sheng Guangzu, said.

Railway construction projects have been almost halted as the government has decided to slow the development of high-speed rail lines after a fatal high-speed train crash that killed 40 people in east China in July.

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