Upcoming reforms will completely open China's railway construction market and invite more competition to the sector.

Reforms concerning investment and financing in the sector will be sped up, covering the areas of planning, multi-channel investment, market-based operations and policy coordination, said the State Council.

A railway development fund will be established using government investment and social capital while local regions and social capital will have ownership and management rights for inter-city railway links and municipal rail links.

Multiple reforms are being made in the sector following the separation of the Ministry of Railways in March into administrative and commercial arms, a move that was made to reduce bureaucracy and improve efficiency.

Government investment and the railway system's financing have long been the primary sources of capital for railway construction. However, these limited channels have become increasingly unable to meet demand for capital.

Analysts said the sector should diversify and attract more social capital for construction projects by breaking up monopolies and investment barriers.