This paper provides an overview of the power sector in China during the past 40 yr, with a special emphasis on hydropower. The article includes a description of the power sector in China and the main problems it is now facing. The alternatives for China's peaking requirements are also described, with mention of both pumped storage and increased hydro capacity as important options. Hydropower has very important side benefits, and these are also described. The article finally summarizes the main concerns of the Chinese Government in sustaining its economic development, and describes the future role that hydropower will play in this development.