Rail authority wearing too many hats

China's Ministry of Railway (MOR) may merge with the Ministry of Transport, according to insiders.

Proponents of such a move point out that it could prevent regulators from stepping on each other's toes when it comes to the rail sector. Yet, the biggest problem with the rail sector is not regulatory overlap, but the MOR's dual role as the top authority in an industry it is also trying to profit from. Not surprisingly, this situation has greatly reduced the MOR's incentives to improve the quality or efficiency of the rail industry.

The MOR had over 2.53 trillion yuan ($406.96 billion) in debts during the first half of last year, leaving it with a debt ratio of 61.08 percent, according to data from the ministry.

Right now, top policy makers should open the rail industry to the market and then beef up the MOR's role as an independent overseer.

The author is Qiu Lin, an economic commentator.

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