The Chinese government recognizes that in order to sustain its economic growth without further damaging the environment, it must change its policies. The government made impressive efforts in a transition towards a green economy under the 11th Five-Year Plan (2006-2010), and its strategies under the 12th Five-Year Plan are even more ambitious. As this study identifies, China is making significant progress in developing renewable energy technologies, greening industry, and promoting the environmental goods and services sector. These activities are creating jobs, economic growth and improved well-being for citizens. However, many challenges still persist, such as fossil fuel reliance, inadequate enforcement of environmental regulations and misplaced incentives.