Japan has gained the upper hand against China in their battle for high-speed railway supremacy in Southeast Asia after it bagged a deal to put up a bullet train system in Thailand.Japan and Thailand entered into an agreement for a high-speed railway starting from the Thai capital of Bangkok to the northern city of Chiang Mai using the famous Japanese shinkansen or high speed railway system.

A memorandum on cooperation for the venture was signed by visiting Japanese Transport Minister Keiichi Ishii and his Thai counterpart, Arkom Termpittayapaisith, on Saturday.Financial details, especially the project’s cost, were not disclosed. But the Nikkei Asian Review reported in May last year that the project could be worth $12 billion.The planned 670-kilometer project is much longer than the 350-kilometer high-speed railway project linking Malaysia and Singapore that Japan and China are currently battling to undertake.

Under the memorandum, phase one of the railway project involves the 380-kilometer section from Bangkok to Phitsanulok. Phase two will be from Phitsanulok to Chiang Mai, a premier tourist destination in the north.Japan will also develop areas along the railway to help increase passenger traffic.The two countries will also establish containerized transportation and railroad projects in Thailand’s so-called Southern Economic Corridor to spur development in the provinces bordering Myanmar and Cambodia.

After Taiwan, Thailand will become Japan’s second export market for its shinkansen system. The Southeast Asia’s second largest economy is also competing with Malaysia and Singapore in the race to host the region’s first bullet train.

Last month, Malaysia and Singapore formally signed an agreement to build an ambitious high-speed rail system that will reduce travel time between the Malaysian capital city of Kuala Lumpur and the tiny city-state to 90 minutes from the current five or more hours by road.