>>reporter: this week on world business... >>china embarks on the biggest rail rollout in history. >>we look at two of the hardest hit industries in struggling spain, construction and tourism. >>we cannot live on tourism only, i mean we would be a very backwards country if our growth would come only from tourism. >>and a cheap and cheerful solution to a lack of credit, upmarket food vans are driving change in the us. >>reporter: 200,000 or 300,000 dollars to open a restaurant, versus 50 or 60 thousand dollars to open a truck.

>>reporter: hello and welcome. i'm raya abirached and this is world business, your weekly insight into the global business trends shaping our lives. china plans to have 25,000 km of high speed rail operational by 2020, this year alone, the bill for construction will come to a hundred billion dollars. it's the biggest, most ambitious, technologically sophisticated and expensive railway expansion inhistory. but does it really make sound economic sense? >>reporter: over half a million passengers every day use china's fleet of a thousand bullet trains. >>reporter: intercity travel is undergoing a transformation, and it's a boon for business. adam mcwhirter frequently flits between his offices in chengdu and chongqing, a 300

kilometre, two hour journey, that costs 20 us dollars, first class. and come 2012, the journey time will halve, once the lastleg of this high speed link is finished. >>mcwhirter: for our company, it's made us a lot more efficient, being able to move managers around where and when needed. you have to book the tickets two orthree days in advance, it's full every single trip i take, it's standing room only. so i think the popularity is definitely there. >>reporter: dedicated high speed passenger lines are also popular with the freight sector, as they should help free up the congested 90,000 kilometres of ageing conventional track.with cargo of coal, commodities and containers forecast to double by 2020, and passenger numbers triple, china desperately needs more rail capacity and fewer logjams. >>scales: when a passenger train travels down a freight line, you have to move the freight to the side

so you can allow the higher speed passenger trains to pass. if you can take that higher speed passenger service off the freight lines and put them on their independent lines you provide greater capacity for the freight. >>reporter: of course, another option is to build much cheaper cargo dedicated lines instead. but high speed rail is supposed to generate greater revenues, from freight and passengers. this is the economic rationale for embarking on an infrastructure and rolling stock project that could end up costing a trillion dollars. >>reporter: in just four years, china has already developed an 8,000 kilometre long high speed rail grid, with top speeds of 350 kilometres per hour. by 2020, a further 17,000 kilometres of track willcrisscross the country, connecting 50 cities with million plus populations. each year, china is spending a hundred billion dollars.

>>reporter: the pace of this build out is astonishing. but the ride so far has been far from smooth.in the first quarter of 2011 alone, the state run railroad made a 570 million dollar loss; while auditors unveiled a staggering hundred million dollars worth of misused or embezzled project funding,which led to the arrest of the railroad's minister. >>mackie: the ministry of railways borrows big,almost 70% of its investment is funded by loans and bonds; with annual interest repayments estimated to exceed 15 billion dollars. china's railroads will need to start performing, very well, to support a debt burden that could rise to over 800 billion dollars by the end of the decade.>>reporter: this is a challenge. for the majority of rail users, those on low incomes, still prefer to pay a lot less and travel by slower, conventional trains; or if these are full, take

a long distance bus. bullet trains are popular with more monied passengers, that is, on routes up to 500 kilometres. but on longer journeys, occupancy rates are unsustainably low, as flying is more efficient. >>jian: in china, the major cities, the distance of major cities for example from beijing to shanghai, from beijing to wuhan, is longer; is at least 1,000 kilometres. so at this distance, the high speed rail has no competitive advantage. >>reporter: this is the case today. but so long as the economycontinues to grow, passenger numbers should rise, well that's the plan. >>reporter: there is, however, a bigger picture. in exchange for market access, japanese, european and north american players have spent years transferring high speed rail

technology to china's state controlled industry. along the way, companies like csr sifang have digested the original tech, developing it further, to produce new tech for even faster trains which they fully claim as their own. and they're now out to capture orders, independently, overseas. >>sansan: if we export the 250 kilometre per hour train, we have to cooperate with our technology transfer partner. but if we export our new generation 350 to 380 kilometre, we can do it ourselves because we have the independent intellectual property.>>reporter: so with the benefit of huge economies of scale from the domestic market, the chinese are now competing head to head all over the world with their foreign partners. and they'realso going armed with offers of cheap loans from china's state owned banks, catching the attention of potential customers from california to south east asia. >>chovanec: they've been

offering very attractive financing terms around the world to people who hire the chinese to come in and build things. that may end up boomeranging and harm china's banking system but in the short run it generates a lot of business for chinese companies, and some ways they're subsiding exports, or subsidising business for chinese companies. >>reporter: for some, high speed rail is an icon of china's rise as a global economic power; though others lambast it as a debt laden, extravagant indulgence. china is clearly building for tomorrow's needs, at today's prices. and along the way, it's stealing a march on the rest of the global railroad industry. >>reporter: tourism and construction are two of spain's major industries, before the crisis hit theyaccounted for a quarter of gdp. both took a serious

knock when the recession took hold, contributing to the country's rapid decline. we took a trip to spain to see how the two sectors are faring today. >>reporter: this is sesena nuevo, a virtual ghost town 40 kilometres from madrid. over 13,000 apartments were built, of which only 4,000 are occupied. >>dominguez: "well, knowing what i know today i wouldn't have come here. but when i did i thought itwould be a good investment as these flats were a lot cheaper than others in the area around madrid." >>reporter: the mayor of the nearby town of sesena believes big developers and lax banks are to blame for recklessly funding building projects. >>fuentes: "the built houses do not fulfil the needs of the population in the area, what was done here was speculation, as many entrepreneurs bought an entire building to resell it

afterwards." >>reporter: it's symptomatic of the hangover from the construction boom across spain. >>one which ironically leaves houses empty, while young potential buyers are unable to purchase, as credit has now all but dried up. >>ekaizer: "there is a permanent need of houses, because young people need to rent and need to buy, but they can't buy now because there is no credit at. we need a policy directed to sell these houses but the houses are part of the balance sheet of the banks." >>reporter: the situation also looks set to worsen. spain's growth is anaemic at around 1% and with huge quantities of surplus stocks, buyers will become even scarcer. there are now 1 million unsold homes

across spain, putting a drag on not just the spanish economy but others across the eu. >>suarez: "houses are still not in the price that they should be, i would say that houses have to godown still. and that will be a real problem for spanish banking sector and the banking sector of other places in the european union, because french banks, and german banks and british banks have stocks of spanish houses that are unsold and probably unsellable. and i think that's the problem in the next few years." >>reporter: it's not just houses standing empty. this holiday resort at jafra near barcelona is almost complete, but abandoned. a sign of how the tourism industry has suffered. >>in 2009 visitor numbers dropped by 10% and revenue by 11%. things do now seem to be picking up; tourist arrivals grew by 3 percent for the first quarter with travellers returning from the rest of europe.

>>farnke: "i like here the sand and sun and the ocean. it's very hot here, not so cold." >>reporter: but the industry is changing; with the rise of cheap air travel european tourists are looking further afield. spain cannot continue to compete on beaches and sun alone. >>suarez: we were trusting for too long the classical sun and beach tourism. for a while it was ok, it seemed a good idea but in the last ten or fifteen years, it didn't work. it didn't work because there were other destinations where people were, especially i am thinking about turkey, i am thinkingabout egypt, i am thinking about tunisia especially. and we were losing those tourists. >>reporter: spain has benefitted from tourists drifting back after unrest in these countries and also has another benefit, having heritage on its side. >>boyano: "it looks

for the beach, it looks for the sand, but not only this. they are also look a lot for the cultural, to see the museum in barcelona, the offer we have in girona, all the area of girona. also the gastronomy and especially the shopping." >>reporter: but tourists are spending less and cultural trips tend to be shorter, with travellers visiting spain for a short weekend trip instead of staying for 2 weeks. >>john teasedale is a british expat who runs a bar. he says that with the slowdown, hotels are offering comprehensive packages, including meals and drinks, and that's hitting his business. >>teasedale: "if the hotels are giving everything free, they don't want to come out to the local bars, and pay for it. in fact it's had a worse effect because the bars that try to attract them in are offering 2 for 1, or trying to reduce the prices, which is killing the businesses off." >>reporter: tourism remains a vital part of the spanish

economy; employing 2 million people and bringing in over 50 billion dollars every year. but there are those that question spain's overreliance on foreign visitors. >>suarez: we cannot live on tourism only. i mean we would be a very backwards country if our growth would come only from tourism. we have other sectors that are good, especially design and clothes andthings like that. we have a small it sector, we have a small chemistry sector as well. >>reporter: so one result of this downturn might be a rebalancing of the economy, with spain playingto its other strengths, not least the resilience of its people. even immigrants working in the beleaguered tourism sector wouldn't live or work anywhere else... >>teasedale: "it's a lovely place. it's a lovely place to live, as i say the people are kind and helpful and the sun, the weather, it's just perfect over here. i can't think of anywhere better on earth to live, to be

honest." >>reporter: still to come on world business... >>as credit dries up, cafes and restaurants become harder to start up, one solution is to start up your engine and take your food on the road. >>archery aims for the mainstream, but can such a minority sport ever draw big crowds >>stay on target... and the rest in just a moment on world business... >>reporter: tough economic times have forced many people around the world to take to the streets, but in california, they aren't protesting, they're enjoying a gourmet meal. >>reporter: "street" and "gourmet" are two words

rarely heard together but these san francisco street food trucks are no roach coaches. take a look at what's on the menu. >>this "off the grid" food gathering happens once a week in san francisco; it's part of a new culinary craze sweeping the united states. what started out decades ago as simple taco trucks for immigrant workers, is now the hottest operational trend in the restaurant industry. >>dick-endrizzi: this is a very important industry to the city of san francisco where we are a culinary city and the mobile foods is a burgeoning industry >>reporter: this particular event started in june last year with 10 trucks, it's now host to around 30 trucks a week. in part the growth is down to a poor economy. >>dick-endrizzi: what we have seen that people who have always had a passion for cooking and love cooking have said...alright, i don't have my job so i am going to try my hand at cooking and this is avery low cost way of entering and getting

into the food profession. >>cohen: when you are searching around for 2 hundred thousand or 3 hundred thousand dollars to open a restaurant, versus 50 or 60 thousand dollars to open a truck ....you can go to friends and family a lot more easily to find that 50 or 60 thousand rather than quarter of a million dollars. >>reporter: at the same time, the gourmet food trucks are proving popular with consumers who don't have as much money to spend but still want to enjoy good food. >>vox pop 1: i've heard a lot about this and you know, i wanted to check it out because i've heard so much about it from friends. >>reporter: it's the variety here, that's the pull. and put all these small trucks together, you've got a big business. >>harrison: this is san francisco's biggest street food market. there are 5 thousand people here tonight, 27 vendors, each making between 1,500 and 4,000 dollars. you crunch the numbers, that's a lot of money changing hands tonight.

>>vox pop 2: fresh popcorn, free smaples, free samples. >>reporter: gross profits for a typical evening's business are 50 thousand dollars. the trend is fuelled by social media sites which have made it easier for operators to build a loyal following without having a permanent location. >>cohen: now you can actually communicate with your customers and let them know, okay; this is exactly where we are, this is exactly when we're going to be there and this is exactly what we're serving. >>reporter: julia yoon's "seoul on wheels" was one of the first of the new gourmet trucks in san francisco. she started up 4 years ago, self funded after selling her dry cleaning business. >>yoon: a restaurant was just out of the question not having any experience um never even waited tables or hosted or washed dishes professionally so i thought it would be so fun and cool to work off atruck and instead of having people come to me i could come to them and share my love for korean food. >>reporter: although start up and marketing costs are lower for food trucks than

conventional restaurants, operating challenges are similar. >>yoon: today i started my day at 6am. i probably won't get home till about 1 30 and i probably do that at least twice a week. right now we are doing 7 services a week sometimes 8 services a week. >>reporter: seoul on wheels has yet to turn a profit, although julia expects to break even next year >>yoon: i still haven't not paid myself a salary, hopefully i'll be able to do that and take a vacation next year. >>reporter: there are no plans for a bricks and mortar establishment for seoul on wheels but often street food events like these help launch new restaurants. veronica salazar will be opening her restaurant this september. >>salazar: i started with 10 dollars i didn't have any money, that's why we started the business andwe grew up little by little ... >>reporter: veronica credits her success to the help she got from a non profit organization, la cocina, an incubator kitchen which helps launch, grow and formalize new food businesses. >>zigas: it's their own capital, what we do is

we subsidize the entry costs so we lower the barrier to entry so business can begin their business with very little capital and then we come up with strategic and innovative access to market solutions so they can bring their product to market quickly, create their own capital and then invest. >>reporter: entrepreneurs get access to resources, lessons in finance as well as the use of the commercial kitchen. veronica's team uses the kitchen to prepare its food. >>salazar: i think that la cocina is really, really important, one because they teach us how to opena restaurant, how to management, the food how to advertise it, to get a permit and a lot of things.i am happy because my dream is come true right now. >>reporter: according to the national restaurant association, sales of mobile trucks and carts across the united states are projected to grow by over 3 and a half percent in 2011. >>up to 30 more trucks are due to launch in san francisco this year. some say there'll soon be a glut and that people might abandon the trucks for restaurants once the economy picks up.

but there's always a chance that now that people in the united states have tried new foods in a new way, street food may just keep on truckin'. >>reporter: numerous niche sports dream of having a professional circuit. some try, many fail, finding it impossible to generate adequate interest and income. but one niche sport that started up a pro tour 3 years ago is slowly but steadily going from strength to strength. >>reporter: there are few things i enjoy more than hiking through the welsh countryside...but if...in the course of my travels...i begin to hear sounds like this...i know i may just be in the wrong place...at the wrong time.... >>reporter: field archery.

tremendously skilful and rather arcane...and on the way to establishing aprofessional circuit... >>goodwin: the only reason why you get the amateur side to grow is because people are able to watchthe professionals and they want to aspire to that level. >>reporter: and for 56 archers...being at this level...means two 9 hour days clambering round a hillside to 28 targets ranging in length from 20 feet to 80 yards....weighed down by around 3500 dollarsworth of kit and gadgetry.... >>well you get a compound bow, it's got wheels, cables. you've got a sight, with a magnifying lens. and then you've got stabilizers...everything is adjustable. aluminum carbon arrow, real thin, so real good in the wind. and then you've got a mechanical release....have to have a good set of binoculars....an equalnometer so you can tell

the angles...you know, range finder. >>reporter: the quality of competition here is very good, i take it. >>white: well yeah you've got 3, 4 world champions here. you've got european champions. it's a very high standard. >>reporter: and of course is a testing one. >>menzer: uphill targets are a lot harder usually than downhill or flat targets... everything just feels long and you really have to lean back to keep your shoulders square when you shoot. >>holderness: and if they've put a target say across the slope that way you've got one foot above the other and it's very difficult to keep your balance. >>reporter: and then there are targets that appear sloped...but aren't... >>reporter: an optical illusion almost. >>menzer: absolutely. >>reporter: it makes you lean over a bit >>menzer: definitely... >>reporter: the angle of the land. >>menzer: exactly right. >>reporter: even the sun can conspire against you... >>menzer: ...its in your eyes...it's

on your equipment, it's reflecting. >>reporter: and the shadows can distort distance perception and stuff like that? >>menzer: absolutely. >>reporter: the series now has 3 annual events in wales, germany and belgium. the key to its survival so far....internet based coverage... >>goodwin: the first thing we had to do we had to produce a media base because if you've got 56 guysshooting in a woods somewhere...it means absolutely nothing, nobody knows about it. >>reporter: there were indeed close to zero spectators while we were there....so it's up to an eventstaff of around 25 to bring the action to the people... >>smith: we wanna get their preparation. how they set bow up and everything else up for the target, how they adjust their sights and what not. >>johnstone: almost looking right into the archer's eyes ...i like to say we're looking into their soul. >>reporter: throughout the event...the footage and scores are collated and fed to an as live website...and streamed to a small, but ever growing audience.... >>goodwin: in the past it was perhaps quarter of a million over a year and in the short space that we've been running then it's gone up to almost half a million.

>>reporter: so far sponsors are strictly from the world of archery...but each event is able to offeraround 17000 dollars total prizemoney... >>menzer: you've come a long way if you're at least being able to win enough money to pay your bills; it's worth it. >>reporter: yet what are the chances of funding 10 annual events...as organizers hope? well..so far mainstream television interest has been...negligible... >>reporter: i mean essentially they don't even give you the time of day? >>goodwin: that's right. >>reporter: what do they say? do they even bother looking? >>goodwin: we don't think so. >>reporter: it is undoubtedly a difficult format to make exciting. the archers are slow and deliberate...their emotions...fairly difficult to read...and after a while...one bullseye does tend to look much like another.... >>reporter: do you ever see anyone shoot a duck or anything? >>smith: no. >>goodwin: if you just show pictures of archers shooting at targets it's boring as hell. it's all down to the commentary and if you can get

the commentary right...then it's entertaining...it's informative. and people will sit and watch it. >>reporter: do you reckon they'll be in each others ears out there? put each other off? >>in the olden days.... >>reporter: but isn't there the temptation to jazz things up a bit? with say...moving targets...flaming arrows...or rowdy distractions....? >>goodwin: this is a serious sporting event. you don't get that sort of thing happening in golf. golf isn't an exciting sport. archery isn't an exciting sport...but it can be very viewable. >>reporter: so it isn't fast...it isn't racy...and the coverage isn't state of the art...but the european pro series...is still very much alive and self supporting...and few niche sports have managed to hit that target.... >>goodwin: it's more than i expected but not as good as i hoped for. >>reporter: it's still going

after 3 years. a lot of circuits probably wouldn't. >>white: it's growing. >>reporter: he never misses! >>it's growing on a regular basis. i think next year he's got six shoots planned and it's a real feasible thing, it's going to take off; he's done a great job. >>reporter: that's it for this week's world business. thanks for watching. we'll see you again at the same time next week.