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The Ministry of Railways is drafting a blueprint to allow private investment in the bottlenecked rail sector.
China boasts the largest rail network in the world, yet the country can only meet about 40 percent of its rail transport demand in peak times.
The vast geography and huge population are major contributors to the predicament. Combined, they make the country's per capita rail mileage shorter than a cigarette.
This year's red-hot economy has also contributed to the seasonal deficiency of rail transport.
But inadequate maintenance of existing routes and lack of construction of new lines should bear most of the blame.
As the economy develops, infrastructure construction becomes a priority in catering to increased market demand.
The rapid rise in investment in road transportation is a prime example. The annual input has reached around 300 billion yuan (US$36 billion) in recent years.
In stark contrast, railway investment is less than 60 billion yuan (US$7.2 billion) annually. The overall investment in the sector from 1997 to 2002 was less than the input in road transport in 2002 alone.
The State opened the road sector and introduced multiple-ownership investors in the 1980s. Investors of various backgrounds were permitted to enter the sector to earn profit.
The rail sector, however, remains primarily a State-owned bloc. The problem is the country is not able to bolster all the investment needed for the sector to satisfy soaring market demands.
When the market economy started to take shape several years ago, policy-makers reached a consensus on introducing the market element into monopolized sectors.
There's been no shortage of high-profile promises to reform monopolies since, but not all sectors have seen substantial steps taken in that direction.
In this sense, the significance of the railway ministry's new initiative lies not in another announcement of commitment to the market, but a real step towards translating words into tangible reform measures.
(China Daily July 26, 2004)
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