China and the Train forward

China Starts Longest Bullet-Train Line, Luring Air Travelers

http://www.bloomberg.com/news/print/2012-12-26/china-starts-longest-bullet-train-line-luring-air-travelers.html

China started its 2,298-kilometer (1,428-mile) high-speed train line, the longest in the world, as the nation boosts investment in rail networks, intensifying competition for airlines.

The first train on the Beijing-Guangzhou line left Beijing West Station at 9 a.m. as scheduled, according to state broadcaster China Central Television. The trains will initially run at a speed of 300 kilometers per hour, reducing the travel time to as few as eight hours from the previous 21 hours, according to the rail ministry.

The new line, which will eventually connect to Hong Kong, is part of the nation’s plan to build a 16,000-kilometer high- speed rail network by 2015, undeterred by a deadly bullet-train accident last year. The new service may lure air travelers and prompt China Southern Airlines Co. (1055) and Air China Ltd. (601111) to cut fares, according to Barclays Plc.

“The continued development of the high-speed train network will marginalize short-haul domestic air routes,” Barclays analysts Patrick Xu and Jon Windham wrote in a note to clients last week. It will “exacerbate the competition on long-haul domestic routes and depress margins.”