Abstract: Scientifically assessing the systematic development of the dairy industry is an inherent requirement to enhance the competitiveness of dairy industry and realize the sustainable development of dairy industry. With complexity and internal interaction, the dairy industry can be divided into four subsystems: including raw milk supply, dairy processing, dairy sale and dairy consumption. Based on China’s dairy industry data from 2006 to 2015 and applying the synergetic theory and the relaxation coefficient method, this paper analyzed the development level of the dairy industry and also included the ordered development level and the coordinated development of the subsystems in this research. Results show that: the maximum of synergetic degree of dairy industry was only 0.024, not reaching a good development stage. The order degrees of the subsystems were relatively low, with the highest value being 0.244 for the processing subsystem and with a slow increasing trend. There are interactions among the various subsystems: the interaction between dairy processing and dairy consumption is the strongest, the interaction between raw milk supply and dairy sales is the weakest. The research indicates that to achieve efficient development of dairy industry system, all the subsystems need to be improved. Therefore, this paper provides the following policy recommendations to promote the sustainable development of dairy industry: to strengthen the construction of high-quality milk source base and forage grass system; to continue to implement the merger and reorganization strategy of dairy enterprises, to enrich the product structure to further develop the domestic and international markets, to strengthen the brand building of dairy enterprises; to strengthen the achievements display in dairy industry and the guidance of consumers.