Traffic simulation is a crucial tool to assess, analyze, and optimize the complex traffic system. Traffic simulation system serves as the fundamental industrial software in the realm of the traffic and transportation industry. Traffic system simulation technology is the key stranglehold problem in China’s traffic and transportation industry. Based on the in-depth analysis of traffic system simulation technology in China and abroad and the overall goal of building a country with a strong transportation network, this paper systematically combs the development status, issues and challenges of traffic system simulation technology and looks forward to the development trend of traffic systems simulation technology in China. It also summarizes four key development directions: multi-resolution simulation, deep simulation, digital twin, and simulation as a service. Finally, the development strategy is proposed to build an autonomous, controllable, safe, credible, efficient, and available traffic simulation system.