CAFE standards have become a widely-adopted policy for improving fuel economy around the world. Following many developed countries, China enacted its first CAFE standards in 2004. Since then, a series of CAFE standards and CAFE related policies came into force in China, coinciding with the growing awareness of the importance of fuel economy from government, academia, media and consumers. The previous literature on China CAFE standards is inadequate. This thesis provides a clear and comprehensive picture of the China's entire CAFE policy mix. It also estimates the technology trade-offs and the technology progress for passenger vehicles sold in China, and the willingness-to-pay (WTP) of Chinese consumers for fuel economy, weight and engine power. Furthermore, it unveils the underlying stories of China's past improvements in fuel economy, predicts its future compliance feasibility, and calculates welfare benefits and losses of implementing CAFE standards in China.