China's power sector has done extraordinarily in support of financial growth during the past twenty years. Confronted with the requirement to enlarge its power capability, the state is authorizing heavily in the construction of new power plants and self-financing capability. Equally significant in the development of the national power sector are the creation of regional power grids and the implementation of an electricity tax reform to wrestle the problems of ineffective power allocation and handling.

Electrical power is supplied primarily by the state-owned enterprises. China has successfully restructured its power industry by closing a large number of small thermal power plants with high coal burning up, heavy pollution, and poor economic efficiency. According to the official statistics, the country produced 1.16 trillion kilowatt hours (kWh) of electricity in 2000, a 6% increase from the previous year; the country has made advances in building and repairing 87 urban power grid projects and 1,590 rural ones.

China has also developed its massive hydroelectric potential so that a larger share of its national demand for electric power can be met with renewable hydropower. Renewable hydropower is tapped from moving water such as waterfalls and fast-moving streams.

The reform and opening up policies have brought great leaps and bounds to the progress of the country's nuclear power industry. Meanwhile, China draws foreign funds to enhance the domestic scarcity of funds in power production and to improve the technological equipment of the power industry. According to the statistic announcement of the PRC on the 1998 national economic and social development issued in February of 1999, the newly-increased yearly production capability in 1998 through capital construction projects included 16.9 million kilowatts of power generation by large and medium-sized generators and 47.26 million kilovolt-amperes of power transformer equipment. China is the country to deliberate the largest nuclear power station construction plan in the world. According to the central government's design, by year 2020, China will possess 40,000,000 KM of nuclear power installed capacity.