China’s high-speed railway (HSR) has experienced rapid development in the past five years. The author explains that institutional factors, namely national monopoly on market resources, a highly centralised management system and substantial support from various departments in the State Council, have contributed to the sector’s growth. Adhering to the independent innovation strategy and by means of “mobilising resources to accomplish large undertakings”, the state created an industrial development model known as the “government-oriented integrated innovation model”, which capitalises on the institutional advantages as mentioned above. Through this model, with the entire national railway network being operated under a unified command and dispatch system, China was able to acquire core technologies from the market, integrate a complex array of subsystems and develop a portfolio of production and research, all of which were conditions essential for achieving the rapid development of high-speed railway in China. This article, in analysing the institutional origins of China’s development of the high-speed railway, sheds light on China’s unique institutional advantages in shaping its national competitive advantages in the world economy today.