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This article explores the relationship between IT adoption and productivity in China, using firm-level database provided by the World Bank. The results show that IT adoption by firms in China has a positive effect on their productivity even after accounting for measurement errors, possible limitations of data and model. This book introduces firstly the background and conceptual background by defining IT and productivity by focusing on the measurement level. Section 3 reviews some relevant research studies. Section 4 and 5 deal with the specification of a two-step model, data description and how explanatory variables are selected. The results of the econometric estimates for overall samples and subsamples with a variety of specifications, the main explanations for the findings, as well as comparison with prior research studies are presented in section 7.