This paper is concerned with improving the livelihoods of rural households in China — especially those involved in ruminant livestock production — in the context of market-oriented reform. Two broad categories of household are considered — diversified households and specialised households. Livelihoods are largely determined first, by the way the households interface with the industries or industry in which they are involved and secondly, by the development paths of these industries. Traditionally, the dominant Chinese approach to industry development is policy rather than market driven. Interventionist policies are introduced that target the construction of production bases with the aim of increasing physical output. At a later stage, attention turns to the development of processing facilities, hopefully, to value add. Little attention is given to development of agribusiness aspects of the marketing chain or to market demand. Nowadays, China is beginning to make the transition from an output-oriented form of industry development to policies that aim to create ‘modern’ agribusiness sectors. However, the interventionist-targeting approach remains dominant and the emphasis in recent years has been on the development of highlyconcentrated, vertically-integrated marketing chains controlled by large semi-government corporations that aim at the high-value end of available markets. The paper argues for a more facilitative policy approach to encourage the growth of a diverse agribusiness sector in China to allow a much wider range of households to participate in, and benefit from, the ruminant livestock revolution.