The Clean Development Mechanism,a flexibility mechanism contained in the Kyoto Protocol, offers China an important tool to attract investment in clean energy technology and processes into its electricity sector. The Chinese electricity sector places centrally in the countrys economy and environment, being a significant contributor to the acid rain and air pollution problems that plague many of Chinas cities and regions, and therefore a focus of many related energy and environmental policies.Chinas electricity sector has also been the subject of a number of economic analyses that have showed that it contains the highest potential for clean energy investment through the Clean Development Mechanism of any economic sector in China. This mechanism, through the active participation from investors in more industrialized countries, can help alleviate the environmental problems attributable to electricity generation in China through advancing such technology as wind electricity generation, dean coal technology, high efficient natural gas electricity generation, or utilization of coal mine methane. In this context, the Clean Development Mechanism also compliments a range of environmental and energy policies which are strategizing to encourage the sustainable development of Chinas economy.