China is set to complete the installation of the world's longest quantum communication network stretching 2,000km (1,240miles) from Beijing to Shanghai by 2016, say scientists leading the project. Quantum communications technology is considered to be "unhackable" and allows data to be transferred at the speed of light.

By 2030, the Chinese network would be extended worldwide, the South China Morning Post reported. It would make the country the first major power to publish a detailed schedule to put the technology into extensive, large-scale use.

The development of quantum communications technology has accelerated in the last five years. The technology works by two people sharing a message which is encrypted by a secret key made up of quantum particles, such as polarized photons. If a third person tries to intercept the photons by copying the secret key as it travels through the network, then the eavesdropper will be revealed by virtue of the laws of quantum mechanics – which dictate that the act of interfering with the network affects the behaviour of the key in an unpredictable manner.

If all goes to schedule, China would be the first country to put a quantum communications satellite in orbit, said Wang Jianyu, deputy director of the China Academy of Science's (CAS) Shanghai branch. At a recent conference on quantum science in Shanghai, Wang said scientists from CAS and other institutions have completed major research and development tasks for launching the satellite equipped with quantum communications gear, South China Morning Post said.

The potential success of the satellite was confirmed by China's leading quantum communications scientist, Pan Jianwei, a CAS academic who is also a professor of quantum physics at the University of Science and Technology of China (USTC) in Hefei, in the eastern province of Anhui. Pan said researchers reported significant progress on systems development after conducting experiments at a test center in the northwest of China.

The satellite would be used to transmit encoded data through a method called quantum key distribution (QKD), which relies on cryptographic keys transmitted via light pulse signals. QKD is said to be nearly impossible to hack, since any attempted eavesdropping would change the quantum states and thus could be quickly detected by dataflow monitors.

It's likely the technology initially will be used to transmit sensitive diplomatic, government policy and military information. Future applications could include secure transmissions of personal and financial data, Xinhua reported.

Governments in Europe, Japan and Canada are about to launch their own quantum communication satellite projects and a private company in the US has been seeking funding from the federal government with a proposal for a 10,000km network linking major cities.The Beijing to Shanghai project was launched last year. Although the Chinese government has not revealed the projects budget, scientists told state media that the construction cost would be ¥100m (£10.17m) for every 10,000 users, according to the South China Morning Post.