Since China promulgated the first explicit industrial policy in 1989, state intervention with respect to business in China has become more industry-oriented. National economic planning has put great emphasis on the development of the so-called "pillar industries", which consist of high-tech sectors with capital-intensive technologies. Meanwhile, policies towards foreign trade and foreign direct investment have become more industry-selective. This industrial policy regime will have to adapt to changes brought in by China's accession to the WTO. In this paper, the contents of China's industrial policy packages are reviewed, and the features of policy instruments the government has relied on to carry out these policy packages are examined. In addition, the incentive implications of these policies on inter-industry resource allocation are analysed. Finally, the likely changes to the industrial policy regime after the WTO are discussed.