China’s national railway operator China Railway has set up a joint venture with Chinese package delivery firm S.F. Holding Co Ltd, as Beijing aims to introduce more private capital into the transport sector. An e-commerce freight platform may result from the merger.

The national railway operator said on Wednesday its cargo subsidiary, China Railway Express Co, would hold a 55 percent stake in the joint venture, while S.F. Holding would hold the remaining share, according to a Nasdaq report. The Shenzhen-based joint venture company will provide cargo services on high-speed rail trains and will also look at creating an e-commerce freight platform, China Railway Corp said in a statement on its official WeChat account.

The companies

China Railway Corp manages the country’s 127,000 kilometre (78,900 miles) rail network, which includes 25,000 kilometres of high-speed rail. The merger with S.F. Holding is not the first partnership the national railway company signs. It sold a 49 per cent stake in a subsidiary that provides wi-fi on bullet trains to Tencent Holdings Ltd and Zhejiang Geely Holding Group in June this year.

Private sector firm S.F. Holding’s subsidiary SF Express is one of the largest companies in the fiercely competitive Chinese package delivery sector. It is also taking part in the opening up of China’s aviation sector to private investment and last year signed a deal to help modernise China’s military logistics.