In transition economies, the impact of governments on industrial technology progress is far-reaching. However, most studies merely focus on the government's positive effects, while ignoring the potential negative effects. This article aims to fill this gap. By applying an analytical framework of complex systems industry to Chinese construction industry, we develop a cause map to explain why the technology progress of Chinese construction industry is so slow. The map identifies three kinds of roles played by government in hindering the technology progress of the construction industry: governments as clients, as regulators and as administrators of industry associations and professional bodies. We further argue that these roles lead to a series of consequences: the separation between design and construction, lagging behind in the introduction of general contracting, high uncertainty in innovation approval and low motivation of construction firms to innovate, and ultimately, the slow technology progress of the industry.