["Environmental Policy and Governance, EarlyView. ", "\nABSTRACT\nMoving from imitation to innovation across both technological and institutional domains represents the mega trend in China. The question remains: what drives these transformations, and how are the difficulties navigated? Drawing upon the case of China's light‐duty vehicle emission standards, we seek to provide empirically grounded answers. The standard and its second to fifth revisions all adopted the European Union standards from 2001 to 2016; the sixth revision of the standards made in 2016, however, shifted toward a more autonomous model. The shift was driven by growing domestic needs. On the one hand, public demand for better air quality called for stricter vehicle emission standards; on the other hand, decision‐makers intended to develop standards that serve domestic rather than international automakers' interests. To turn this intent into reality required sufficient policy capacity, which the responsible agency initially lacked but subsequently managed to acquire. Specifically, policy capacity was expanded through two mechanisms: the regulatory agency leveraged its nodality and authority to mobilize resources from domestic firms and research institutes and used China's structural power in global markets to access critical information from foreign regulators and suppliers. Building on these findings, we view policy capacity not as a static set of attributes but as a dynamic process of weaving fragmented capacities into usable ones, triggered by critical decisions and shaped by structural contexts. Overall, this study advances our understanding of Chinese policy‐making by showing how policy capacity can be enhanced through mechanisms beyond policy experimentation and borrowing.\n"]