Looking into China’s Strategic Emerging Industries under the initiative ‘Made in China 2025’, my research seeks to cover the relationship between new regulations and the fostering of state-targeted innovation. Empirically I look at the strategic emerging sectors of New Energy Vehicles, Industry 4.0 and Next Generation Information Communication Technology. The goal is to uncover where policies align and where they divert along with discovering what kind of impact they have on varying stages of innovation and industry formation. Moving from the theoretical paradigm of Political Economy, the latter part of the project looks into the corresponding impacts on industry level. Inquiries will be made into the governing of the knowledge economy along with the creation of new cluster dynamics and the reconfiguration of state and market under China’s State Capitalist System.