The　Chinese　government　has　adopted　many　policies　to　save　energy　and　electricity　in　the　chemical　industry　by　improving　technology　and　reforming　its　electricity　market.　The　improved　electricity　efficiency　and　the　electricity　reform　may　indirectly　reduce　expected　energy　and　electricity　savings　by　decreasing　the　effective　electricity　price　and　the　marginal　cost　of　electricity　services.　To　analyze　the　above　issues,　this　paper　employs　the　Morishima　Elasticity　of　Substitution　of　the　electricity　cost　share　equation　which　is　estimated　by　the　DOLS　method.　The　results　show　that:　1)　There　exists　a　rebound　effect　in　the　Chinese　chemical　industry,　but　it　is　quite　large　because　the　electricity　price　is　being　controlled　by　the　government;　2)　the　reform　of　the　electricity　market　reduces　the　rebound　effect　to　73.85%,　as　electricity　price　begins　to　reflect　cost　information　to　some　extent;　3)　there　is　still　a　lot　of　space　for　the　reform　to　improve,　and　the　rebound　effect　could　be　reduced　further　once　the　electricity　price　is　adjusted　to　transfer　the　market　information　more　correctly.　In　order　to　succeed　in　saving　electricity　and　decreasing　the　rebound　effect　in　the　chemical　industry,　the　policy　implications　are　provided　from　perspectives　of　the　improved　energy　efficiency　and　electricity　pricing　mechanism.