The Chinese Train is not "competing" with airlines
AlanGirvan: I am not sure the Chinese are intending to compete with air transport over those distances. As you rightly point out, the distances are a bit too large.
I think their main consideration is the cost of fuel in an oil-depleted world, and the train's ability to serve multiple destinations along the way. One noticeable difference between China and Australia is that while there's nothing much between our major cities, in China there are LOTS of cities of around a million people on the run from CAN to PEK :-)
I think the Chinese Government has rightly concluded that it will soon run out of fuel and airspace to move 1,400,000,000 people around!
The high-speed rail from Guangzhou to Wuhan (519 miles / 835 km) takes 3 hours exactly at an average speed of 280 km/hr. By air, it's also a three-hour trip, assuming one hour in the air, an hour to get to the airport and check-in, and an hour to get your bags and a taxi to your destination. Rail wins, because both stations are near the middle of town and the rail fare is about RMB 210, the air fare about RMB 1,100.
The train to Beijing is aiming to go 100 km/hr faster: they're testing at 420 and aiming to average 380. A seven-hour journey by train, as opposed to five-and-a-half by air.
I have traveled on the MagLev at 431 km/hr. Trust me, you would not describe it as "smooth". And the cost (including operating cost) has dissuaded even the Chinese from wanting to build any more of it. They will extend it to the other airport at Shanghai, and call it quits.
Brisbane/Sydney/Canberra/Melbourne should certainly be built: for exactly the same reason the Chinese are building CAN/SHEN/PVG/PEK.
My $0.02