Transportation is the pillar of the Chinese economy. However the transportation system was until 1980 undeveloped and neglected. Therefore some problems occurred which affected the development of the economy to the bad side, e.g. it hindered the movement of coal from mine to user, the transportation of agricultural and light industrial products from rural to urban areas, and the delivery of imports and exports. Since 1980, the development of the transportation sector was given priority.
In 1986, the transportation system consisted of many new features. The freight traffic was dominated by the waterborne transportation. In east, central and south-west China, by the Chang Jiang (Yangtze River) and in Guangdong Province and Guangxi-Zhuang autonomous region, by the Zhu Jiang (Pearl River). Provinces were linked by railroads, with the exception of Xizang (Tibet). Double-track lines, electrified lines, special lines and bridges were also added. The subway was operating in Beijing and Tianjin, and construction was being planned in other large cities. National highways linked provincial-level capitals with Beijing and major ports. The harbours still had some major problems, but the first connections all over the world were made. The civil aviation was in progress, and made great development during the 1980s.
In 1985 the transportation system handled 2.7 billion tons of goods. Of this, railroads 1.3 billion tons, highways 762 million tons, waterways 434 million tones, ocean shipping 65 million tons and civil airlines 195,000 tons.
The 1985 volume of passenger traffic was 428 billion passenger kilometres. Of this, railroad traffic 241.6 billion, road traffic 157.3 billion, waterways traffic 17.4 billion and air traffic 11.7 billion.
Ownership and control of the different transport systems varied according to their roles and their importance in the national economy. The railroads were owned by the state and controlled by the Ministry of Railways. In 1986 a contract system for the management of railroad lines was introduced in China. Five-year contracts were signed between the ministry and individual railroad bureaus that were given responsibility for their profits and losses. The maritime fleet was operated by the China Ocean Shipping Company (COSCO), a state-owned enterprise. The national airline was run by the General Administration of Civil Aviation of China (CAAC). Regional airlines were run by provincial-level and municipal authorities. Highways and inland waterways were the responsibilities of the Ministry of Communications. Trucking and inland navigation were handled by government-operated transportation departments as well as by private enterprises.
Transportation was designated a top priority in the Seventh Five-Year Plan (1986-90). Under the plan, transportation-related projects accounted for 39 of 190 priority projects. Because most were long-term development projects, a large number were carried over from 1985, and only a few new ones were added. The plan called for an increase of approximately 30 percent in the volume of various kinds of cargo transportation by 1990 over 1985 levels. So each mode of transportation would have to increase its volume by approximately 5.4 percent annually during the 5-year period. The plan also called for updating passenger and freight transportation and improving railroad, waterways, and air transportation. To achieve these goals, the government planned to increase state and local investment as well as to use private funds.
The Seventh Five-Year Plan gave top priority to increasing the capacity of existing rail lines and, in particular, to improving the coal transportation lines between Shanxi Province and other provincial-level units and ports and to boosting total transportation capacity to 230 million tons by 1990. Other targets were the construction of 3,600 kilometres of new rail lines, the double-tracking of 3,300 kilometres of existing lines, and the electrification of 4,000 kilometres of existing lines.
Port construction also was listed as a priority project in the plan. The combined accommodation capacity of ports was to be increased by 200 million tons, as compared with 100 million tons under the Sixth Five-Year Plan (1981-85). Priority also was given to highway construction. China planned to build new highways and rebuild existing highways to a total length of 140,000 kilometres. At the end of the Seventh Five-Year Plan, the total length of highways was to be increased to 1 million kilometres from the existing 940,000 kilometres. Air passenger traffic was to be increased by an average of 14.5 percent annually over the 5-year period, and air transportation operations were to be decentralised. Existing airports were to be upgraded and new ones built.