Reform in China has been a process of continuous exploration and practice, a fact particularly evident in the realm of railway sector. Beginning in 1986, in an effort to overcome severe internal and external challenges, the then Ministry of Railways proactively introduced a package of reforms known as contract responsibility system (CRS), which granted greater operational autonomy to the railway system and boosted the initiative of railway workers. However, the reform faced significant constraints and interference from both within and outside the industry, making its path far from smooth. Although the contracted tasks were largely fulfilled, the railway CRS ultimately failed to set the railway sector on a sustained path of rapid development and was effectively shelved. Consequently, the “bottleneck” effect on the national economy became increasingly pronounced. Nevertheless, the railway CRS prompted deep reflection within Chinese society on a series of critical issues, including the orientation of national railway policy at the time, funding mechanisms for rapid railway expansion, and the relationship between railways and the market. These reflections provided valuable lessons and references that contributed to the subsequent accelerated development of China’s railway sector.