Abstract: The analysis and evaluation of the implementation results and impacts of the S&T policies have great significance in enabling the government to improve such policies. The paper has collected China's 454 policies issued by the central government most relating to the industrial innovation and studies the relationship between the innovation performance and the power and stability of policy based on the C-D production function by using the 2000-2009 industry panel data. The research results reveal that the power of the innovation policy had a positive effect only on the technological performance but not on the economic performance. The instability of policy has negative effect on the motivation of the policies on the technological performance. The policy has a lag effect on the performance. Moreover, by studying the relationship between different policy instruments and the innovation performance, it is found that the supplying policy has a positive effect on the technological performance, and environment policy has a positive effect on the technological and economic performance, and the demanding policy has a positive effect on the economic performance. Finally, the paper suggests that government should pay more attention to the demanding policy and improve the innovation policy system, etc.

Key words: power of policy, stability of policy, instruments of policy, innovation performance