China’s dairy industry has made tremendous progress in the past 20 years, with cows and milk production growing >10% /yr. In 2000, total number of dairy cattle was <5 million producing 8.27 million tons of milk. In 2014 there were 14.98 million producing 37.25 million tons of milk. Dairy was the most rapid growing section among all livestock production. Herd size shifted from 5 cows in 1995 to a larger present size, with 40% of dairy cows in herds >50 cows. Over 70% of milk is produced and processed in northern China. Dairy industry international trade has shown strong activities since China became a WTO member. Animal importation increased from 37453 cows in 2009 to 99348 cows (2011) and 195000 cows (2014). Importation of dairy products grew more significantly. In 2009, China imported 596999 tons of dairy products, but increased to 1,880,000 tons in 2014. 88% was dry products, mainly milk powder and whey. Seventy percent of the imported milk powder was from New Zealand with Australia, EU and USA also important dairy trade sectors. China exported 20000 to 25000 tons of dairy products annually in the past 5 years. Annual urban dairy product consumption increased from 15 kg/ person (2000) to 23 kg/person (2012), while consumption in rural areas remains relatively low and stagnant (<10 kg/person). Dairy processing plants are becoming larger with Yili and Mengniu processing 10,000 tons of raw milk daily. Currently, raw milk production is from 3 models: Cropping area model (70% of milk; small family farms, local feeds, local raw milk stations), suburban area model (20%; near stable consumer markets) and pasture model (10%). Average annual productivity is 5500 kg /cow. Low productivity means low efficiency and high cost. It is reflected in high raw milk prices ($0.8/L in 2013). China will be the world market center of dairy products in the future due to the rapid growing demand of the huge population. More international trade of dairy products will encourage information and technology exchanges, which will help improve quality and efficiency of domestic production. China’s dairy industry must be ready for international competition and cooperation. Standards, policies and legislations will be critical for such prospects.