This paper, based on 2000—2016 data, uses MSIH(2)-VAR(1) model to study the interaction between China's economic growth and new/traditional energies with results showing a U-shaped trend between the traditional energy and economic growth. The traditional energy has undergone descending-ascending stages as economy grows, and continues to ascend. The new energy and economy are at the descending stage of the U-shape, not in a co-integration. Transition probability matrix suggests a stable relation between economy growth and new/traditional energies. Government shall focus on making long-term polices regarding this to avoid any short-term solutions. Impulse Response function indicates that the new energy is increasingly imposing impacts on economic growth, continuously; the traditional energy is on the contrary. This paper suggests that promoting an upgrade of new energy supports the sustainable development of economy for the long-term.