By Xuan Xiaowei, Department of Development Strategy and Regional Economy, Development Research Center of the State Council (DRC)

Research Report No 15, 2015 (Total 4700)

Abstract：

China's economy has entered a state of new normal, which, from the perspective of spatial economics, means "the improvement of productivity brought by optimal allocation of factors in space", should play a more important role in economic growth. In the new normal, it should become the new implication and content of China's regional policy on how to put focus on improving "division of labor on the basis of specialization, market integration and industry agglomeration", and further stimulating economic growth through optimal allocation of factors in space. The primary cause of traditional "regional competition" development mode is the existed system arrangements set by the central and local governments. The major concern of regional policy in the new normal should transfer to "how to promote joint development among regions, especially among cross-provinces and larger areas", in which, how to advance "market integration" will be of paramount importance. It should be the key part of regional policy adjustment to "further clarify the respective administrative responsibilities of central and local governments, and promote the legalization of the relationship between central and local governments" in the new normal.