A Chinese high-tech company is building the world's first small-sized unmanned cargo ship, demonstrating that China is taking the lead in the unmanned surface vehicle industry.

On Wednesday, the Shenzhen-based Oceanalpha Co Ltd signed a memorandum of understanding with Wuhan University of Technology, the Chinese Classification Society and the Zhuhai municipal government to start a project that will result in the small-sized unmanned surface vehicle, or USV.

"It will be the first USV that is entirely domestically developed with Chinese technology and guided by the Beidou navigation system," said Sun Feng, vice-president of CCS.

The vehicle will be ready to test in the water by the end of next year and put into commercial operation by 2019.

It will have a loading capacity of 500 metric tons and be able to sail 500 nautical miles (930 km) with its battery fully charged.

Such unmanned vehicles are expected to lower the number of human-error incidents at sea, reduce labor costs and cut emissions by using batteries instead of gas.

"Over 70 to 80 percent of incidents that happened in the sea are man-made, and 40 percent of the entire running cost goes to human labor," said Zhang Yunfei, founder of Oceanalpha.

"Using USVs can largely reduce the cost and incidents. Also, the vehicle body is much lighter, which enables it to be powered by batteries instead of gas, efficiently cutting down the emission," he said.

In recent years, China has developed very fast in the USV and intelligent surface vehicle sector, Sun said.

On Tuesday, China State Shipbuilding Corporation delivered the world's first smart ship, Great Intelligence, with a loading capacity of 38,800 tons. It is equipped with the China-made marine system SOMS, and has self-learning ability and an intelligent operation system.

"Great Intelligence has a smart brain and will become smarter as it learns by collecting data," said Sun Wei, deputy general manager of CSSC. "It will analyze data and provide optimized suggestions to the captain."

Early this year, Oceanalpha launched an unmanned guard vehicle, which has already been adopted for military use.