In service to wider national strategies, the Plan for Educating and Training Outstanding Engineers (petoe) is a pilot reform initiative of higher education in China. It is a comprehensive, innovative, and unprecedented national plan putting forward four key tasks to establish a new multi-sector collaboration mechanism in engineering education. The new mechanisms include multi-sector coordination, participatory guidance of industry, joint training based on industry-university collaboration, and supportive policies of central and local governments. The purposes of the plan are to bridge the gap of supply and demand, promote the partnership between university and industry, and enhance the adaptability of engineering education to social and economic development. This paper discusses the above content with a focus on the challenges of Chinese engineering education, key mechanisms, program progress, impacts, and challenges for next steps.