Though he awaits trial, his fate — and perhaps the ministry's — seemed sealed when bullet trains collided near the eastern city of Wenzhou in July 2011, killing 40 people and injuring 177. The accident outraged the country's growing middle class — the prime users of the high-speed rail. Taking to social media sites, they questioned whether speedy development resulted in shoddy work. A government investigation cited design flaws and mismanagement.
In the aftermath, the government began taking a harder look at corruption throughout the railways and the ministry. In one case, almost all of a $260 million railway line in the northeast had to be redone because unqualified sub-contractors filled bridge foundations with rocks and sand instead of concrete.
The ministry employs 2.1 million staff and handled 1.8 billion passengers in 2011. Its subsidiary departments oversee all railway operations, and its companies are involved with everything from design of railways to construction and freight transport. Beyond that, there's the Railway Art Troupe, which sings, dances and puts on acrobatic shows and operas. The China Locomotive Sports Team trains athletes in soccer, boxing, weightlifting, swimming, and track and field.
Until last August, it operated its own courts, as it did a police force until 2009. Capital spending last year was 630 billion yuan ($100 billion) — rivaling the entire 670 billion yuan ($105 billion) military budget — and its mounting debts have worried the government.
"Who is going to pay the debt that is expected to amount to nearly 3 trillion yuan?" said Zhao Jian, a railway expert at Beijing Jiaotong University. He said the official debt figure is 2.6 trillion yuan ($414 billion), but he estimates it will go higher as ongoing projects are completed.
The reorganization is supposed to add further restraint. A newly created China Railway Corporation will build and manage freight and passenger services, while a railways administration under the Transport Ministry will set technical standards and enforce them.
The railway so far has been able to rely for a large part on drawing revenues from freight and passenger services. A big challenge ahead is keeping that money coming in as competition from planes, cars and river transport increases.
Associated Press researchers Yu Bing in Beijing and Fu Ting in Shanghai contributed to this report.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.