The increasing resource and environmental pressures have impeded China's efforts to quickly promote its people's quality of life, while protecting its natural environment. Due to lack of resources, technologies and capital, China needs to seek a more integrated development strategy. Industrial ecology (IE) may be one solution as it aims at optimizing the use of materials and energy in products, processes, industrial sectors and economies by systemically mimicking natural systems in an industrial setting. The relevant practices and experiences in the developed world have proved that there is a degree of effectiveness and efficiency to development through the application of IE. It is even more critical to apply the principles of IE in China, where resources are scarce. However, compared with developed nations, China faces different environmental, economic and social constraints. Therefore, China has to adopt different approaches to implement the concept of IE. In this paper, we first review the current practices in eco-industrial development in China. Then the advantages and barriers to applying IE in China are analyzed and recommendations are provided. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.