Over the past 30 years , the Zhejiang Provincial Government has made reforms to expand the powers of the county government , by increasing the number of sub-provincial governments through afinancial systemof province directly-administrated counties ,implementing growth-oriented fiscal policies , enlarging the economic power of rich counties , and reforming personnel management system . The reform measures have built an incentive structure for sub-provincial governments .Thereis a mutual coupling effect between the incentive structure for the sub-provincial government and the development of a private economy such that the county-level economies of Zhejiang Province have been sufficiently rapid .In such circumstances , the county-level economies of Zhejiang Province are shaped by many prosperous massive economies ,each divided alongcounty boundaries .This led to regional segmentation and weakened cities'a bility to gather production factors . In the meantime , the shortage of market supply has been replaced byexcess productioncapacity ,andcapital scarcity replaced bycapital spillover .For the purpose of achieving an economic transformation and upgrading industry , it is essential to design a new incentive structure for sub-provincial governments .