Datong Locomotive Works was established in 1984, a somewhat late date, perhaps, to commence the production of steam-powered locomotives, since diesel and electric locomotives were already beginning to appear in China. But coal-fuelled steam locomotives had been the backbone of China's industrialization since 1952, so there was no lack of adherents of steam who were eager to point out the advantages of using the energy form which the country had in greatest abundance, namely, coal. The locomotive factory at Datong, which covered an area of 10,000 square meters, quickly brought production online, and at its peak, the factory employed more than 2000 workers. It was one of the largest – if not the largest – employer in the region.
Four years after opening, on September 15, 1988, the First Datong International Steam Locomotive Festival of China was held, including an entry calling itself the "Roving Exhibition of Historic Steam Locomotives of China". Already before the production of steam locomotives at Datong Locomotive Works had ceased, and well before the last steam engine had rolled out of the factory, a permanent exhibition, the Datong Steam Locomotive Exhibition Hall, was set up in memory of the factory, thanks to help and inspiration from the roving exhibition. By the close of 2005, however, all steam locomotives in China had been replaced by more modern, less-polluting diesel locomotives.
In connection with the retirement of China's steam locomotives, steps were taken to preserve a sufficient number of these old relics to prevent them from ever disappearing from China's railway-cultural and industrial history, and though some will not regret their disappearance, there will always remain a cadre of romantics for whom the railway is synomymous with the steam-powered locomotive – indeed, what would the Orient Express have been without the steam locomotive?!
Though Datong Locomotive Works continued to produce steam locomotives, the death knell had been sounded on the steam locomotive. On 23 October, 2002, six locomotives and associated rolling stock from the Science and Technology Museum of the Ministry of Railways – including the famous Model "O" steam locomotive, China's oldest extant steam locomotive, and the railway coach once used by Empress Cixi of the Qing (CE 1644-1911) Dynasty – were exhibited in the Locomotive and Rolling Stock Exhibition Hall of the Datong Locomotive Works Railway Museum. Datong's Locomotive and Rolling Stock Exhibition Hall, which has become a general railway museum, not just a museum over the steam-locomotive branch of Datong Locomotive Works (the factory now specializes in electric locomotives), has preserved the following items for its permanent collection:
1) A Jie Fang type steam locomotive produced by Sifang Locomotive and Rolling Stock Works on August 1, 1952, which was the first steam locomotive of the People's Republic of China. After the christening of that locomotive – aptly named the "August 1" – the claim that China was incapable of building steam locomotives had been proven a myth, and a new page of Chinese history began to be written as a new era of rolling stock production had seen the light of day in China.
2) A Yue Jin type steam locomotive, designed and trial-produced by Jinan Locomotive and Rolling Stock Works in 1958.
3) A "KD7" type steam locomotive based on a 1944 U.S. locomotive design that had been widely manufactured in America. This type of steam locomotive was to have been used to support other countries in an eventual Anti-Imperialist War, to transport military materiel.
4) Other, lesser known locomotives, but including some Chinese "workhorses".
The Locomotive and Rolling Stock Exhibition Hall also contains an exhibition that includes more than 30 photos of early locomotives, a flag and a water injector once used on the Beijing-Zhangjiakou Railway Line, as well as other invaluable railway memorabilia linked to the steam engine era. In addition, the exhibition hall periodically displays a number of items not belonging to the permanent exhibition. These include – but are not limited to: the Model "O" locomotive, various imperial coaches, the "Dragon" locomotive, the Qian Jin type steam locomotive, the Jian She type steam locomotive, the Dong Feng 4 model diesel locomotive and the Shao Shan 3 model electric locomotive.