Abstract: China’s industrial policy has its special institutional background. The political and economic relations between the central and local governments provide a unique perspective for understanding China’s industrial policy under the background of great power governance. China’s industrial policy can be divided into two patterns: “vertical administrative instructions” and “horizontal competition and separation”. The former is that the central government formulates industrial policies, and the local governments formulate corresponding supporting measures to implement the central policies according to the instructions of the central government. The latter is that local governments issue relevant policies to promote the development of local industries or strengthen the implementation of central policies and increase the weight at all levels. As a result, industrial policy has two unique characteristics of “central-local inconsistency” and “local competitive separatism”. Under the new development pattern, the direction of China’s industrial policy transformation is central-oriented. That is, under the premise of ensuring the leadership of the central government, the enthusiasm of the local governments should be brought into full play. And on the basis of fully clarifying the relationship between the government and the market, we should pay attention to the formation of a vertical balance mechanism between local and central government, and reconstruct the formulation mechanism, implementation and execution mechanism, orientation and regional system of industrial policy. The key points of the central-led industrial policy are: the central government selects basic and strategic industries for policy support; the basic code of conduct of local governments is not to hinder the construction of a unified national market; taking advanced manufacturing clusters as an important support for industrial policies; replacing traditional industrial policy measures such as financial subsidies with support methods that are more in line with international rules; establishing an Industrial Policy Coordination Committee to strengthen coordination in the implementation of industrial policies.