Abstract This paper builds a theoretical framework for biased technological progress,labor structure and wage inequality according to the CES production function,and estimates its econometric equation system for Chinese industry over period 1987-2011.The analysis results show that the relationship of skilled labor and unskilled labor is alternative.The industrial technological progress is biased skilled labor,and the most obvious is the non-metal products industry.Meanwhile,the structure of labor and trade liberalization helps narrow the wage gap.Skill-biased technological progress,foreign direct investment and capital deepening can expand the wage gap.