Industrial Policy – Energy Policy Linkage: China - a Case Study

China like other developing countries, is confronted with the difficult challenge to achieve trade-off between short term economic growth and long term sustainable development addressing social equity issues and environmental concerns. The industrial policy or lack of it is one of the critical factors in developing strategies for economic growth. Industrialisation drives the economic growth and energy is the sine qua non for industrialisation. On the other hand unbridled economic growth resulting into exploitation of natural resources, particularly sources of energy, is not economically and environmentally sustainable in the long run. Thus industrial policy - energy policy linkage forms an important element of sustainable development strategy. The study concludes that China is using its energy policy most strategically. Not only it addresses climate change and energy security concerns of China, but also serves as key component of industrial policy. China has already emerged as a major competitor in newly emerging market for renewable, both domestically as well as internationally. Apart from contributions towards growth through exports, energy policy is also serving major tool in generating employment, absorbing new technologies and achieving foreign policy goals for China.