China's industrial policy for high-technology industries combines key features of the policies pursued elsewhere in East Asia, such as opening to foreign investors and supporting domestic firms. Leveraging its large market size, China has gone further than other developing countries by promoting standards for products that compete in China with products controlled by major electronics companies. This paper analyses the experience to date with this Chinese policy in the consumer optical storage industry, set against the backdrop of China's evolving national innovation system. China's standard-setting policy is politicised but ultimately pragmatic, as such avoiding imposing excessive costs on the economy. It may also have dynamic learning benefits for Chinese firms which are starting to compete in global markets.