BEIJING - China's railway rates for freight and passenger transport will continue to be set by the government, announced a senior official with the National Development and Reform Commission (NDRC), China's top economic planner, on Friday.

Cao Changqing, head of the NDRC's department of price, said that the country will continue to implement government-set or government-guided prices for the railway sector after the China Railway Corporation (CRC), a State-owned company that takes over the commercial functions of the former Ministry of Railways (MOR), went into business on March 17.

Cao said the railway sector, constituting China's main public transport facilities, is a key basic industry. Its pricing scheme is concerned with both the sector's normal operation and development, as well as the daily traveling and vital interests of the general public.

The state will be very cautious in making any price adjustment in the railway sector, taking into account various factors including operation, construction, public acceptance and coordinated development with other modes of transport, according to the NDRC official.

Under Chinese law and regulations, hearings will be held before adjustments in the basic passenger train ticket fare, Cao said.

In China's latest railway reform, endorsed at the just-concluded annual session of the country's top legislature, the former MOR was dismantled into two parts, with the newly created CRC carrying out business functions and a state railways administration fulfilling administrative functions.