China and Pakistan have launched a direct rail and sea freight service, with the first cargo train departing from Yunnan, an inland province in southwest China, the official Xinhua news agency reported.

A cargo train loaded with 500 tonnes of commodities left Kunming, capital of Yunnan, for port city of Guangzhou from where the cargo will be loaded on ships and transported to Karachi, marking the opening of the new route.

"The route helps locals businesses connect with the world market," a representative from the New Silk Road Yunnan Limited said. The new service is said to reduce the transport cost by over 50 per cent.

The new rail, sea freight service will cut logistics cost, including that of transport, by 50 per cent compared to past services, the news agency reported.

The service is a part of China's Maritime Silk Road initiative of which the China-Pakistan Economic Corridor project (CPEC) is an extension.

Pakistan and China kicked off first trade activities under CPEC in October as over a hundred Chinese containers arrived at the Sust port in Hunza, following clearance from customs. The containers were headed to Gwadar.

About CPEC

The CPEC is a 3,000-kilometre network of roads, railways and pipelines to transport oil and gas from Gwadar Port to Kashgar city, northwestern China's Xinjiang Uygur autonomous region.

Proposed by Chinese Premier Li Keqiang during his visit to Pakistan in May 2013, the CPEC will act as a bridge for the new Maritime Silk Route that envisages linking three billion people in Asia, Africa and Europe.

An official agreement on the corridor was signed between the two countries in May this year during President Xi Jinping's historic visit to Pakistan.