After Japan occupied a large part of northern China during the Sino-Japanese War, it set up a puppet government known as the Provisional Government of the Republic of China. In 1938, the Provisional Government nationalised the various railway and bus companies in its jurisdiction, after which the South Manchuria Railway set up a subsidiary, called the North China Transportation Company, to operate the railways and bus services within the Provisional Government's territory. With its headquarters in Beijing, the NCTC at its peak employed 110,000 people, of which 70% were Chinese. The company was liquidated in 1945 following Japan's defeat in the Pacific War, and the railways were taken over by the China Railway.