China’s power sector has performed impressively between the 1970s and 1990s in support of economic growth. Faced with the need to expand its power capacity, China is investing heavily in the construction of new power plants and self-financing capability. While the country still depends mainly on domestic capital funds to develop its power industry, foreign capital is increasingly sought to import power equipment and advanced technology. To bring in more capital, China has made efforts to attract foreign financial involvement, mainly in the form of multilateral and bilateral loans. Equally significant in the development of China’s power sector are the establishment of regional power grids and the implementation of electricity tariff reform to tackle the problems of inefficient power distribution and usage. This is a study of all these issues related to China’s power sector.