The potential market for desalination industry is forecasted in China for a long term. A co-generation policy is proposed in power production and desalination. It has been predicted that the desalination would become a huge industry in China provided that the technology of desalination is improved and fresh water cost reduced to a certain Ievel accepted by Chinese residents. The potential market for desalination industry is forecasted in China for a long term. A co-generation policy is proposed in power production and desalination. It has been predicted that the desalination would become a huge industry in China that that the technology of desalination is improved and fresh water cost reduced to a certain Ievel accepted by Chinese residents.