Ministry of Railways’ dismantling, a farewell to the planned economy

China’s Ministry of Railways will be dismantled and its functions will be integrated according to State Council’s restructuring plan submitted to the National People's Congress (NPC) on March 10.

From the First Five-Year plan to the Twelfth Five-Year plan, the transport has always been the country’s national economic lifeline which determined the important position of Ministry of Railways in the country’s economic development history.

However, drawbacks of Ministry of Railways’ functions of both a government department and an enterprise has no longer adapted to the development of market economy with the development of times. The dismantling of the Ministry of Railways is also a farewell to the planned economy.

The Ministry of Railways, a government body, is also in charge of the railway business with total assets of several trillions. For a very long time, the Ministry of Railways also had a public security system, forming a close running system, which is called the last planned economy fortress.

Many NPC delegates believed that the separation of the Ministry of Railways’ government function and enterprise management is a fundamental measure to release railway market’s energy. Consequently, the investment and demand will be rebalanced.

The great-leap-forward development mode of railway construction must be avoided, said Li Hongchang, vice professor of Beijing Jiaotong University, as an enterprise for public service, over-investment and excessive construction will aggravate debt risk.

As a matter of fact, China’s railway construction is far from saturated. Wang Mengshu, the NPC delegate and academician of the Chinese Academy of Engineering (CAE), said the U.S. railway mileage has surpassed 200,000 kilometers but China is less than 100,000 kilometers.

Sun Zhang, professor of Tongji University, said the transport capacity still needs to increase in the next 20 years. How to profit from this golden opportunity by introducing investment and lower threshold of social funds is the key method for Chinese railway’s development in the future.

Edited and translated by Ma Xi, People's Daily Online
Read the Chinese version: 铁道部64年存废之路
Source: Beijing Times

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