Conceivably, regional flight services in China may face tough competition in the next decade from China Railway Rolling Stock Corp Ltd, if the country's railway vehicle manufacturer overcomes all the technical barriers and pushes magnetic levitation or maglev trains (operational speed: 600 km per hour) into the market.

In October, the Ministry of Science and Technology decided to transfer certain key research projects to select State-owned enterprises, including CRRC. A high-speed test line for a maglev train, with a length of no less than 5 kilometers, is expected to be completed in Qingdao of East China's Shandong province by 2021.

"Even though our European rivals previously were trying to hold back our market expansion in developing wheel technology-based high-speed trains, they have failed and generally there is no European country capable of competing with China in this field," said Jia Limin, head of China's high-speed rail innovation program.

However, Japan remains a strong competitor not only in the areas of bullet train operation and development but high-speed maglev train technologies. The country plans to put its 500 km/h maglev trains with cryogenic superconducting technologies into operation by 2027.

"Therefore, we must make a breakthrough as soon as possible to develop maglev trains that can run at speeds between 200 km/h and 600 km/h, to ensure we'll have adequate market share in both domestic and global markets in the future," said Jia.

The project will be led by CRRC Qingdao Sifang Co Ltd, one of the three subsidiary bullet-train makers. Investment in these projects, which include building of a research and development institute, will reach 3.22 billion yuan ($465 million). The government will allocate 433 million yuan, with the remainder to be raised by CRRC.

The railway major will also start R&D of cross-border high-speed trains that can run at 400 km/h and alternate between different track gauges, ranging from 60 cm to 1.676 meters.

Compared with other types of urban rail transportation, maglev trains are quiet and can achieve high speeds because they don't actually ride on rails with wheels but hover centimeters above the track through the use of magnets, avoiding speed-reducing friction, said Ren Jian, deputy director of CRRC's technology management department.

The world's first maglev line was launched in Shanghai in 2002, connecting a metro station to Shanghai Pudong International Airport. With speeds of up to 430 km/h, its 30-km route takes less than eight minutes to travel.

"Such trains will consume 10 percent less energy than the country's 350 km/h bullet trains currently in use," said Sun Fuquan, a researcher specializing in railway vehicles at the Chinese Academy of Science and Technology for Development.