China's transportation system has undergone profound changes in recent years. Traditional transportation methods such as railways face more and more challenges from rapidly-growing highway and air transportation.

Meanwhile, many serious problems still exist in China's transportation sector, which, if not addressed in time, will hamper the country's sustainable economic development. Railway transportation is traditionally the predominant carrier of both passengers and goods.

With the exception of Tibet, all other regions in the mainland have been connected together through railways, which contribute tremendously to the development of the national economy.

China currently has 22 trunk rail routes upholding its nationwide freight and passenger flows.

Compared with 1997, the volume of passenger transport in 1998 achieved a 1.08 per cent increase, reaching 936.2 million, while the volume of goods transported decreased by 5.01 per cent to 1,612.4 million tons.

Statistics indicate that during the past six years, the volume of both passenger and goods transport decreased on the whole.

The low price set for railway transportation can explain the deduction of its profit. Moreover, the increasing volume of short-distance passengers and goods on railways takes up railway transport capacity and does not add significant economic benefits.

Unlike railway transport, highway transport has developed rapidly. Currently more than 97 per cent of counties and towns in China are accessible by highways.

Since 1991, 90 per cent of the increased volume of passenger transport has been carried out through highways. In medium and short-distance transport, highways have advantages over railways. The improvement of service and equipment is another reason for the rapid growth of highway passenger transportation.

The highway cargo transport has also developed quickly, although not as fast as passenger transport. With the proper adjustment of China's industrial policy, those high-tech products of high value-added will be increasingly popular. Under this circumstance, highway cargo transport, which is characterized by small batch and rapidity, will meet this trend and gain developmental momentums.

As to water transportation, China has strengthened its waterway infrastructure by building 170 major coastal and inland ports and 10,183 berths. Container transportation has achieved a yearly increase of 30 per cent since 1990.

Comparatively, China's offshore and ocean-going shipping is expanding rapidly while inland water transportation is growing at a rather slow pace.

The development of China's foreign trade certainly fuels the expansion of offshore and ocean-going shipping. But due to a shortage of funds for maintenance and reparation, the inland water mileages kept decreasing. In addition, the slow pace of technical and equipment improvement and organizational problems lead to inland water transport losing its competitive advantage.

With China's economy booming, air transport is by and by becoming a leading choice for transportation. The current volume of air passenger and cargo transport is increasing by 17 and 18 per cent respectively annually.

China's transportation sector has undergone apparent changes and accomplished significant development. However, serious problems still exist in the way of its further development, which would have much bearing upon China's overall economic progress.

Currently, the scale of China's transportation infrastructure cannot meet the requirement of its overall economic development as well as the improvement of people's living standards.

In terms of territory and population, the strength of China's transportation network even falls far behind that of some developing countries such as India and Brazil, not to mention developed countries.

The improvement in living standards has brought about a change in consumption. The main part of their expenditure now goes towards costly items such as travelling instead of basic necessities. However, insufficient highways and express railway lines, inadequate public transport system plus poor services, bring many inconveniences to the travellers.

The improper layout of China's transport facilities is another obstacle to its overall progress.

The eastern areas have a well-developed transportation infrastructure. However, the western areas, although rich in natural resources, are held back in economic development by its underdeveloped transportation. Because the western areas are inhabited by multi-minorities, the lack of transportation facilities also becomes a strategic issue that may affect China's national security.

Serious environmental contamination created by transportation does not jibe with the requirement of China's sustainable development.

For the past several years China has achieved a rapid growth of transportation at the expense of environmental pollution. For example, the worsening exhaust pollution in big cities has become a worrisome problem for residents.

Poor technical and equipment levels obstruct the further development of China's transportation sector. Concerning railways, heavy loading of goods transport, express passenger transport and automatic management are only at their embryonic stage. High grade deep-water channels are very rare, and many inland water channels are left in a natural state without further improvement. In addition, the outdated civil air control and navigation systems also hamper the growth of civil aviation.

The confusion of labour division between railway and highway transportation affect the efficiency of the entire transportation system.

Due to price advantage, the railways have carried a large amount of short-distance travellers, who would otherwise travel by highways.

At the same time, limited by poor road conditions and equipment, highways also shoulder lots of short-distance transportation.

Finally, the heavy social burdens the transport sector have shouldered and the government's strict control over this sector have weakened its competitiveness.

In China, the transportation sector has various roles to play. It is responsible for the flow of goods and personnel, it functions as the driving force for regional economic development and it plays an important role in emergent materials transportation, national defence and territory exploitation. Heavy burdens have increased its cost and make it difficult to earn profits.

In the meantime, under the government's strict control, the sector has little freedom in management. Therefore, it cannot flexibly deploy its resources according to the market demand.

The author is a research fellow with the Development and Research Centre of the State Council.