Responding to climate change represents a tremendous challenge to the community with a shared future for mankind. China has committed itself to achieving carbon peaking goal by 2030 and carbon neutrality goal by 2060. The dual carbon goals are not only China’s solemn commitments to the world as a responsible power but also key strategic objectives of the systematic socio-economic reforms, transition, and development of the country. Energy plays a crucial role in reaching carbon neutrality. Given China’s particular situation featuring a high proportion of fossil energy and rapidly increasing rigid demand of energy, this study proposes a pathway for China’s energy transition. In this aspect energy transition is guided initially by government policies and driven by market forces in the long term while focusing on both carbon emission reduction and carbon sequestration, capture, utilization and storage. Carbon pricing, through carbon taxes and emissions trading, lies at the core of the pathway, with the future proportion of fossil energy in the primary energy mix and the level of end-use electrification serving as critical indicators. Specifically, it is recommended to fully leverage government guidance and market dominance to facilitate energy transition and reach carbon neutrality in China, and there is a vital need to vigorously develop core technologies for both carbon emission reduction and carbon sequestration, capture, utilization and storage. Furthermore, it is necessary to effectively manage relationships of economic development with carbon neutrality and energy security, between national emission reduction targets and those of all provinces, cities, and enterprises, between traditional fossil energy companies and emerging new energy enterprises, between short-term actions and long-term goals regarding carbon emission reduction, and the coordinated progress on carbon emission reduction for China and the other countries across the world.