Abstract China is in its industrialization and urbanization development stage, which requires strong energy support. With the largest population in the world, the energy endowment of China is relatively small. Therefore, energy conservation is one of the key tools for China's sustainable development and energy security. When making policies for conservation, the Chinese government needs to deal with rebound effect carefully. In 2012, China's light industry consumed 316 million tons of coal equivalents, accounting for 9 percent of the country's total energy consumption, which is about the total amount of energy consumed by South Korea. Based on the translog cost function, the magnitude of rebound effect in China's light industry is estimated for the first time using the dynamic ordinary least squares and seemingly unrelated regression methods. Considering the asymmetric effects of energy prices on energy consumption, the rebound effect is approximately 37.7% and all the inputs are substitutes except for labor and energy. The different magnitude of rebound effect between light and heavy industry is discussed and some policy implications are provided for more effective energy conservation, allowing for the rebound effect.