The marketization reform, which has been intensively promoted by the central government, has eliminated many traditional functions of local governments under the old development model. ANBOUND research team considers that while the general direction of the reform is correct, the systematic and uniform execution of it has reduced many "powers" of local governments. As a result, local governments dare not perform their duties according to their judgments, leading to a remarkable increase in inaction. Therefore, how to balance regulation and development is a question that needs to be considered by the central government.