This policy brief suggests that carbon pricing can accelerate the diffusion of low carbon technology in China, based on the results of empirical studies conducted by Kansai Research Centre of IGES focusing on China’s most energy intensive industries. Many low-carbon technologies are profitable but require some initial investment. Chinese companies strongly prefer a short payback period for these investments. In order to accelerate technology diffusion in its energy intensive industries, China should implement carbon pricing policies to reduce the payback period for these investments and enhance their profitability. Even a moderate carbon price could bring about much earlier diffusion of many low-carbon technologies. IGES research found that a moderate carbon price would not significantly reduce the profits of Chinese companies, and it should be acceptable to them. To establish moderate and stable carbon prices, the national greenhouse gases emissions trading scheme (GHG ETS) in China should ensure that the emissions allowances of target sectors are in line with the country’s emissions peak pledge, allocate the allowances strictly, and strengthen data transparency and accuracy. A carbon tax should be also levied in China on the emissions outside of the national GHG ETS to generate a price floor for the carbon market. Even a modest tax rate could generate a large amount of revenue to support further investment in climate-friendly technologies and help to strengthen China’s competitive advantage in these markets. Carbon pricing in China, i.e., the national GHG ETS, should be coordinated with other related policies such as those on energy efficiency. This is because IGES research found that different policy combinations have different effects on the technologies in different sectors and at different diffusion stages. Moreover, the policies themselves are interrelated. For example, a strict energy savings target mandates companies to adopt direct mitigation measures and reduces the demand of emissions credits on the carbon market. Therefore, coordination of different policies in different sectors is necessary in order to effectively accelerate the diffusion of low-carbon technology in China.