I construct a three-industry model to study the effect of industrial credit policy. This model features both industrial interaction and firm heterogeneity, and is calibrated by manufacturing sector’s data of China. According to the calibrated parameters, downstream firms face tighter credit constraint than upstream firms in China. Industrial credit policy experiments reveal two preliminary results. First,
credit constraint has significant influence to the economy in this multiple-industry model. Second, downstream credit subsidy is more efficient than that of upstream, but the efficiency difference is no more than several percent and will decrease as subsidy increases. In this model, efficiency is defined as the average final goods product of additional capital input, which is caused by credit subsidy.