Shougang Steel has been pursuing the development of low iron loss and high permeability grain oriented electrical steels for more than a decade. Grain oriented electrical steel requires a very strong Goss {110}〈001〉 texture and as such a comprehensive control of thermo-mechanical processing parameters is required to achieve a strict control of texture. In this paper the key metallurgical problems associated with manufacture of grain oriented electrical steel are discussed, including the factors that affect both primary recrystallization and secondary recrystallization leading to the development of a strongly textured final sheet. The metallurgical factors affecting magnetostriction of electrical steels are also analyzed, and a technological approach for domain refinement, and its effect on magnetic properties, is described. Examples of magnetic properties under non-sinusoidal magnetization conditions are also reported and analyzed. As a result of continuous research and development efforts the high permeability low iron loss grain oriented electrical steel of thin gauge products of 0.2 mm/0.18 mm thickness have recently been developed to meet the requirements of the new China national standard of energy efficiency grades for power transformers.