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The concept of the smart grid has been gaining more and more attention worldwide since it was proposed by the U.S. Electric Power Research Institute in 2001. Recently, it has been propelled again by the promotion of low carbon economies in developing countries. To satisfy the exponential increase in electricity demand and alleviate environmental degradation caused by fossil fuel-based power generation, China has made great efforts in constructing a smart grid as a substitution of traditional energyintensive power grid. In the 12th Five-Year Plan in particular, it was stated that emphasis should be placed on the development of renewable energy and smart grids. The objective of this paper is to provide an insight into the current research on smart grids, and shed light on the development of smart grids in China, based on the analysis of which, the obstacles and barriers in the development process are identified. Finally, policy prospects on the construction of smart grids in China are proposed from the aspects of technology, administration and management. [ABSTRACT FROM AUTHOR]