China observation 1-high speed train and subway

When I traveled around China, I was impressed by the construction of high speed train and subways. China is spending trillions on building a high speed train network and most of them will be finished by 1012. It will benefit second tier cities along the train line.

The negative impact will be on airlines. If you can travel between Shanghai to Beijing in 4 hours by train there will be fewer demand for airlines. I am very cautious on Boeing. Not only Chinese demand for planes will diminish in 3 to 5 years but also the defence budget in U.S. will be cut because of the budget constraints.