With electricity demand growing at a torrid pace-about 15% per year, faster than any other country in the world-China is fast-tracking the construction of new generation facilities, about 80% of which are coal-fired. China's total capacity in the reference scenario of World Energy Outlook 2006 (WEO2006) released by the International Energy Agency (IEA) is projected to practically 3.4 times, from 442 GW in 2004 to 1496 GW in 2030, growing at 4.8% per year on average. The vast majority of this huge generation requirement will still be met through the construction of coal power plants. Because new coal power plants built today have a long life cycle and are not easy to upgrade the technologies involved, decisions made now will have a major impact on the coal utilization mode in the coming years. Thus, the future 20 years is the strategic opportunity period of the transition of conventional coal utilization. Because the Integrated Gasification Combined Cycle (IGCC) can supply electricity, liquid fuels, hydrogen and other chemicals if needed at low pollution level, and has the potential to make carbon capture and sequestration much easier and cheaper than traditional pulverized coal boiler power plants, it should be the strategic direction for China to meet the requirements of the energy and environmental challenges. This paper makes an overview of China's energy and environmental challenges and opportunities, and describes the IGCC technology. It discusses why China should develop IGCC. What are the foundations for China to develop IGCC? What are the rational driving forces to develop IGCC in China? What is the reasonable developing path of IGCC in China? (c) 2007 Elsevier Ltd. All rights reserved.