This article examines the emergence of carbon standards and labels, with a focus on China as one of the key drivers of the future global economy. The article attempts to answer two questions. First, as Chinese firms take on more substantive roles in global production networks, how do they deal with environmental and sustainability standards, especially those which concern carbon footprints and emission reduction in production and supply chains? Second, to what extent and how is China likely to become active in setting sustainability standards in tomorrow's markets? The underlying question is: what strategies do Chinese actors follow in response to carbon standards? The core argument of the article is that China cannot choose <italic>whether</italic>, but only <italic>how</italic>, to react to the emergence of international carbon standards. Ignoring and/or mitigating such standards are not viable options, at least in the short run. The most promising pathway for Chinese actors is to leverage either their own standards, i.e. ones tailored to their needs and preferences, or standards which they have already helped to transform in favour of their interests by engaging in international standard-setting processes.
