Based on the mechanism of interaction among R&D, technological progress, the change of industrial structure, and economic growth in both supply and demand sides, and with the help of dynamic input-output analysis, in this paper a system dynamics model is constructed, focusing on the notable impacts of technological change on structural change in the Chinese economy. Through modelling and policy analysis,some new findings and patterns of long-term development, including the preferential consequences and opportunity for industrial development, future prospects for China's S&T and economy during the next fifty years, the evolution of industrial structure in the process of industrialization, and resource allocation to different industries and R&D expenditure allocation, are obtained.