This essay will take China’s high-speed rail innovation as an example to analyze Chinese government-driven innovation model. The authors introduce two variables that are institutions and cognition to analysis framework. It shows that different institutions and cognition construct different industrial policy paradigm which will affect the innovation model. In different periods, cognitive frame determines what kind of technology innovation path can be chosen and institutions determines what kind of industrial structure can be established. Under the construction of cognition and institution, Ministry of Railways promoted technology innovation through competitive-cooperative mechanism. On one hand, government integrated industrial resources to build the national innovation platform. On the other hand, government consciously created oligopoly competition not only to maintain the vitality of innovation but also to prevent excessive competition.