China is a big producer as well as consumer of bicycles. Since 1990s, electric bicycle, a derivative of bicycle, has developed rapidly in China. The annual output of electric bicycles is increasingly with the growth rate of over 100%. The output reached 58,000 vehicles in 1998, and the figure rose to 6.76 million units in 2004 and to 20 million in 2006.

Presently, there are over 1,900 electric bicycle producers with manufacture permits in China. They are mainly distributed in Shanghai (94 enterprises), Zhejiang Province (219 enterprises) and Jiangsu Province (381 enterprises). The three provinces accumulatively take 70% of all electric bicycle enterprises with licenses in China. Since there is a low barrier for access to electric bicycle manufacturing industry, the majority of producers have a respective output of less than 10,000 vehicles per year. About 30% electric bicycle enterprises are assembly manufacturers, and about 40% are OEM producers.

Currently, there are good social environments for the development of China electric bicycle industry. The market demand grows fast, and a lot of progresses have been made in manufacturing technology and energy equipping. In particular, the approval of "The Road Transportation Security Law of the People's Republic of China" in the fifth session of the standing committee of the 10th National People's Congress enabled electric bicycle to gain legal recognition.