China has the potential to become a major source of innovation for the world. The scientific investment is in place and rapidly growing. But in order to reap the benefits of this investment its organisations will have to become better at managing innovation. One of the key elements of innovation management is the determination and implementation of a sound technology strategy. The purpose of this paper is to offer a framework and a detailed overview of what it entails to develop and implement a technology strategy. The paper emphasizes the alignment of the strategy with the organisational competencies and the strategic context, as well as the capacity to manage risk. The attention is also drawn on the need to find better ways for intellectual property protection, leveraging the Chinese market to explore opportunities for innovative ideas and the need to create less hierarchical organisations, that enable creative thinking.