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China will put US$360 million to renovate a stretch of its section of the transnational highway linking China's Kunming City with Bangkok of Thailand, Chinese official sources said.

Running through a mountainous area, the stretch covers 97 km between Simao and Xiaomengyang in Yunnan Province. Construction will begin at the end of this year and a four-lane express highway will be built.

At present there is only a rough road, according to Li Yuguang, director of the Yunnan Provincial Communications Department.

With a total length of nearly 1,800 km, the transnational highway starts in Kunming, capital of Yunnan, runs through Laos and ends in Bangkok. The China section in Yunnan is 688 km.

China has invested 12 billion yuan (US$1.45 billion) to build new highways or renovate old ones along the route. The remaining stretches are expected to be completed by the end of 2006.

The project was initiated by the Asian Development Bank. China, Laos and Thailand reached an agreement in 2000 to build a high- quality highway, which will eventually be a land connection with Malaysia and Singapore.

Experts say the highway will serve as an important channel of exchanges for the proposed China-ASEAN (Association of Southeast Asian Nations) free trade zone.