This report describes and explains how,in the period 1990-2008, China's railway sector hascontributed and responded to the incredibly challengingtransport demands generated by China's economicdevelopment, and highlights the plans and possibilities thatlie ahead. In 1949, China had only 22,000 km of poorlymaintained and war-damaged railway line, less than 1,000 kmof which was double-tracked with none being electrified.Since then, the government has transformed the railwaysector into a vital element of China's nationaltransport system and a key contributor to China'sextraordinary record of economic growth. Today, China Railis the second biggest carrier of rail freight and thebiggest carrier of passenger transport in the world. It hasthe largest combined rail traffic task of any nationalrailway system in the world, carrying about a quarter of theworld's railway traffic on about seven percent of theglobal route-km of public railway. This paper describes howthe Ministry of Railways, and its constituent regionalrailway administrations and other entities, have created amodern rail system by adopting proven internationalpractices and technologies, giving them distinct Chinesecharacteristics, and adapting them to Chinese circumstances.