(Yicai Global) Feb. 12 -- More than one-quarter of China's bike-sharing firms went bankrupt or ceased operations last year as the previously rapid-growing sector reached a saturation point, the country's transport ministry says.

More than 20 of China's 77 bike-sharing operators closed down or exited the sector during the past year, said Liu Xiaoming, vice minister for transport at a press briefing on Feb, adding that the industry as a whole rolled out some 23 million bicycles in 2017, facilitating 17 billion trips with daily usage peaking at 70 million trips.

Companies in the sector have faced a range of deep-rooted industry challenges during the past year ranging from liquidity issues and failures to return to user-deposits to intensifying competition and government restrictions on operations, contributing to the market exits.

The development of shared bikes has helped to reduced traffic congestion costs by USD2.6 billion (CNY16.1 billion), Liu said. "Although this new sector is a good thing, it must be regulated and controlled," he added.

The government is currently considering further reform in the sector and has received 14 suggestions and proposals for new policies so far. Despite the positive social impacts of the new industry, the transport ministry aims to further strengthen management especially in the distribution of bicycles in cities and parking facilities. The excessive numbers of shared-bicycles in cities are considered an eyesore by some. The government also aims to deal with the misuse of user-deposits among firms.

As China's shared-bike market has matured, Beijing Mobike Technology Co. and Beijing Bikelock Technology Co.'s Ofo have established themselves as the only dominant players in the market and grown into comprehensive service platforms. However, even these two bike-sharing giants face cash issues with Ofo an ongoing USD1 billion investment target of tech behemoth Alibaba Group Holding Ltd.