Abstract: Industrial policies dominated by local governments have intensified market barriers and local protectionism in the form of administrative region economies, severely hindering the construction of a unified national market. There is an urgent need to advance the unified national market by adopting centralized industrial policies led by the central government. The key focus areas include reducing market transaction costs on the production side by alleviating barriers in factor markets and intermediate goods markets, as well as reducing transaction costs on the consumption side by addressing market segmentation for goods. Centralized industrial policy aims to foster a unified national market by promoting the free flow of factors and fair competition, eliminating various local government practices of creating small self-contained cycles with their polices. This approach should leverage the unifying role of centralized industry policy to mitigate the fragmenting effects of local industry policies and actively facilitate communication among local governments. Additionally, implementing the regional coordinated development strategy should serve as a driver for constructing a unified national market.
