Electricity generation in China has been growing rapidly at a rate of around 8% per annum. To meet the demand, China is rapidly developing its own power equipment manufacturing industry. However, the Chinese manufacturing industry can provide only about 70-80% of the power equipment needed. This opens a huge market for overseas engineering companies. Direct sale, technology transfer and joint ventures are the important ways to step into this market. The current situation of China＇s power equipment manufacturing industry and its international co-operation is reviewed, and it is illustrated that joint ventures or heavy local involvement seem to be the best alternatives.