Beijing Foreign Studies University, School of International Business Abstract Based on present research on retailing innovation in China, this paper categories retailing innovation as three types and illustrates the problems and relevant policy making. In order to make a good innovative environment, Chinese government should apply financial and tax policy, education and training policy, infrastructure construction and intellectual property policy to solve the common problems of retailing innovation. At the same time, Chinese retailing companies should try to improve their abilities of innovation and innovation management, focus on efficiency and effect of innovation, increase customers' satisfaction and loyalty, finally make a long-term development.