Abstract: Building a unified, open, and orderly competitive nationwide market is the foundation for reshaping the competitive advantages of big countries, building a new development pattern, upgrading the modernization level of the industrial chain, and realizing the coordinated development of regional economies. The current market segmentation in China is mainly manifested in various selective market interventions by the government during the transition period, such as local government-led industrial policies, market barriers for property rights transactions, and segmentation of commodity and factor markets. The incentive mechanism of "competition for growth", regional preferential policies and non-standard preferential policies, local interaction strategies under the fiscal decentralization system, foreign trade preferences under the terms of trade of small countries, and the virtual government cooperation mechanism are the direct and deeper reasons for the formation of the phenomenon of "administrative region economy", It is closely related to the growth system determined by the catch-up strategy. Based on this, this paper puts forward that the strategic goal of China's modernization determines that the speed type of catch-up should give way to the efficiency and quality type of catch-up, and the economic functions and development driving mechanism of local governments need to be fully utilized. At this stage, we can start with transforming the target preference function of local government and reforming the implementation mode of local government led industrial policy. In the future, we should gradually realize the transformation from catch-up government to service-oriented government and from constructive finance to public finance. At present, we should formulate a negative list of direct market intervention by local governments; promote the construction of a unified national market by regions and levels; promote the construction of factor market from easy to difficult by the public classification of factors; give consideration to the centralization of central power and the enthusiasm of local development, and realize the legalization of central local relations; encourage enterprises to carry out cross regional mergers and acquisitions and strengthen the micro foundation of market integration.
