On December 26, 2009, the world's longest high-speed railway—the Wuhan-Guangzhou High-Speed Railway—was put into operation, connecting the two cities, which are over 1,000 km apart, in three hours. The railway provided a needed boost to the travel, catering and recreation industries along its route.

The large-scale railway construction strongly boosted domestic demand for iron and steel, cement, machinery and other related products. Last year, the railway industry created 6 million jobs, according to the People's Daily.

At present, about 85 percent of timber and crude oil, 60 percent of coal and 80 percent of iron and steel are transported by rail.

However, the vigorous development of China's high-speed railway has to some extent crippled the aviation industry, forcing airlines to close air routes that encountered severe competition from the railways. After the Wuhan-Guangzhou High-Speed Railway began operating on a normal schedule, passengers on flights from Wuhan to Guangzhou dropped 11.5 percent.

Striking a balance between railway and airline development poses a unique challenge to the authorities.

Lenovo Reboots

Thanks to the world economic recovery, Lenovo Group, the world's fourth largest personal computer (PC) manufacturer, posted a net profit of $80 million in the third fiscal quarter ending December 31, 2009, reversing a $97-million loss in the same period of the previous year.

Strong sales revenue, which increased 33 percent year on year to $4.8 billion during the quarter, propped up net profit and increased its global market share to 9 percent, according to its quarterly report filed to the Hong Kong stock exchange.

China remained Lenovo's biggest market. Its sales in China surged 45 percent year on year to $2.3 billion, accounting for 47 percent of its total.

The company also benefited from consolidated PC sales in both emerging and mature market. By the end of December, total sales revenue in the emerging markets, including India, Russia, and the Middle East regions, totaled $857 million, up 53 percent year on year. Mature markets, including Western Europe, Japan and Australia, rose 13 percent to $1.7 billion.

"Lenovo will focus on the mobile Internet market this year while maintaining its competitiveness in the PC market," said CEO Yang Yuanqing. Yang said Lenovo would not be satisfied with the 9-percent global market share but would try to acquire a much larger share.

Hainan Heats Up

Since the Central Government announced to build southernmost Hainan island into an international tourist destination, the tropical island has experienced an influx of hot money as investors hope to be a part of the future economic surge.

One housing project in Haidiandao in Haikou, the provincial capital of Hainan, sold at 15,000 yuan ($2,200) per square meter in 2009. But after the news broke about Hainan's future as a tourist destination, the price rose to around 30,000 yuan ($4,400) per square meter.

Property dealers even refused to take mortgages, and only accepted full payment in cash. In extreme cases, some are selling apartments and houses before construction has commenced on their acquired land.

Wei Liucheng, Secretary of the CPC Committee of Hainan Province, said he was also caught off guard by the sudden surge in the real estate industry. Wei admitted Hainan lagged far behind the standards of an "international tourist destination" in many aspects.

Many feared another bubble burst in Hainan, as the island experienced a dramatic property downfall 14 years ago due to a sudden pullout of speculative money.

"The current housing price is way beyond local people's capability. Meanwhile, the high housing prices directly pushes up consumer prices, which add heavy pressure to the local people's living costs," said Xu Yan, a director of the Zhejiang Commerce in Hainan.