Editor's Note: The Central Committee of the Communist Party of China and the State Council, China's Cabinet, recently issued an outline plan for the integrated development of the Yangtze River Delta region, confirming the strategic status of the region's integrated development. 21st Century Business Herald comments:

Despite the steady progress the Yangtze River Delta region has made in promoting integrated development in the commodity market, factor market, property market and even market regulation, there is no denying that the region is still plagued by market segmentation and trade is not smooth due to some conflicting interests among the various administrative areas. Given that the different administrative areas have different interests and value orientations, and their duty boundaries may overlap, this may lead to disagreements over the common goal of integrated development.

The similar natural endowments of the cities may also bring about industrial structural uniformity in the region. All this poses challenges for the region in the transformation of government functions and industrial policy coordination and highlights the need for different cities to establish incentive compatibility mechanisms and to work for the common cause of integrated development.

The Yangtze River Delta region still attracts a large inflow of migrant workers. Transforming these migrants into local residents as well as implementing corresponding reform measures would produce dividends for the region. The enthusiasm of different cities in the region for reform should thus be fully activated so that reforms have positive effects. The whole region should be encouraged to adopt a people-oriented development approach that lays a solid foundation for regional economic development.

Of course, the fundamental way to solve these challenges is to further deepen reform, give full play to the role of the price mechanism and market-based resource allocation functions, remove local protection and administrative barriers and confine the government to the role of watchman. Besides, local laws and regulations that restrict regional economic development should be abolished so that market players in the whole Yangtze River Delta region can operate in a unified and clear legal environment.

On the whole, the Yangtze River Delta is an area where the government's governance experience is relatively complete and the level is relatively high, but there are still some areas in which progress can be made. If reform can break through some bottlenecks, the region will be able to put the icing on the cake.