The report reviewed the development history of China's lyocell industry. The industry's rapid growth has been underpinned by full localization of R&D and manufacturing for core equipment and breakthroughs in diversification of key raw materials. Unit production costs for Lyocell in China have decreased by 30%, while product quality has steadily improved, establishing a significant global competitive advantage. Downstream application fields have expanded comprehensively, and the industry development ecosystem has become complete. Substantial development potential remains in raw materials, processes, smart factories, downstream applications, and other areas in the future.