From 1986 to 1991, China's railway sector entered a “proactive change” phase, actively seeking to resolve its status as a severe bottleneck in the national economy. This period was marked by three key pillars: a push for comprehensive reform, the implementation of the “Contract Responsibility System”, and the launch of major construction campaigns. Facing increasing financial strain from new infrastructure policies and a worsening capacity-demand gap, the Ministry of Railway (MOR) proposed the Contract Responsibility System. This reform, inspired by the successful Guangzhou-Shenzhen Railway pilot, linked the sector's operational performance to its funding. Under this system, the MOR contracted with the state to meet targets for freight and passenger volume, and infrastructure expansion in exchange for greater financial autonomy. The system initially improved efficiency and service, boosting transport turnover significantly. However, it soon faced issues like inflation, rising safety incidents due to an overemphasis on targets, and limited revenue growth due to fixed fares. In response, the MOR adjusted targets and strengthened safety oversight. Alongside this, the railway sector adopted “Self-sustaining Approach to Building New Railways” using internal funds. This approach funded three major projects: the Datong-Qinhuangdao coal line, the double-tracking of the Hengyang-Guangzhou Railway, and railways in East China. While these projects helped alleviate regional bottlenecks, they ultimately failed to resolve the nationwide capacity deficit, setting the stage for more market-oriented reform.