This thesis studies the mechanism of industrial upgrading and examines the cases of China’s two renewable high-tech industries, the electric vehicle industry and the wind turbine industry. The thesis firstly explores the relevant literatures in the fields of economics, politics and business, given the multidisciplinary nature of industrial upgrading. For the industrial level and firm level study of industrial upgrading, Peter Nolan’s study of global business revolution and the cascade effect and Gary Gereffi’s study of global value chains are two important theoretical and framework guides of this thesis. One important originality of this thesis is that it identifies the bottom-up industrial upgrading pattern of Chinese electric vehicle battery industry which has upgraded from making low value-added consumer electronic batteries to high value-added vehicle-used batteries and then to electric vehicles. For the wind turbine industry, it is more like a top-down approach initiated by the Chinese government which helped to nurture the Chinese wind turbine industry from the ground up. This thesis enriches Peter Nolan’s study of cascade effect. In the electric vehicle industry, there is a window opportunity for Chinese companies to cut in the automobile value chain and form a new round of cascade effect. As in the wind turbine industry, this thesis shows a variant cascade effect that Chinese sub-system integrators tend to provide more standardised products and the relationship between the system integrators and the sub-system integrators is not as deep as the case in the Europe. The Chinese government’s industrial policies to support the upgrade of these two industries have been flexibly changed back and forth between protection and openness based on different industrial development stages and different market competitive degrees. This is because either too much protection or too less protection in the beginning is not beneficial for industrial upgrading. However, evidences show that the whole trend of Chinese government’s policies in electric vehicle and wind turbine industries is now indeed towards a more open and market driven approach. The results of the industrial upgrading of the two industries are mixed. Although it is remarkable that Chinese electric vehicle and wind turbine companies have already occupied the biggest market share of the world, there are still many challenges facing them. Much of the supporting material and data in this thesis are collected from the fieldwork conducted in 16 cities in the US, China, Germany and the UK, and the institutions that have been visited include companies, governments, universities, electric vehicle factories and wind farms.