Electric power has become the most widely used secondary energy. As a result, the electricity industry's development will, in turn, directly influence other industries, people's daily lives, and the whole economy. China is one of the most rapidly developing economies, making it one of the biggest consumer of electricity in the world. Thus, the development of electric industry in China is not only important for the development of China itself, but also the energy pattern all over the world. In this study, we focus on analysing the market-oriented reform in China's electricity industry after the adoption of reforming and opening policies in 1978. By following the time path, the detailed content of the reform, as it was applied and modified over time, is first introduced. Then, an empirical investigation is conducted on the major policies in the process of China's electric power industry reform. Through quantitative measurement, the contribution of each major policy is clearly defined, so that conclusions concerning the reform in the past and suggestions for its future direction can be reached and made. It is found that both successes and deficiencies occurred in the reform process, and that China's electric industry has made significant efforts to overcome obstacles as they have been identified. However, even though great progress has been made in China's electric power industry from 1978 to 2009, more efforts are still required to finally achieve market operation in the industry. It is expected that this study can positively contribute to the development of China's electric power industry, as well as to electric power industries in other countries.