INSTITUTIONAL INNOVATION AND FUNCTIONAL TRANSITION OF LOCAL GOVERNMENT AND DEVELEPMENT OF PRIVATE SECTOR IN WENZHOU AND YIWU

Abstract: This paper selected two cities in Zhejiang Province, Wenzhou and Yiwu to take a look at the relations between the local government and their private sector since the adoption of the reform and opening policy in the late 1970s, from the angle of the functional transition of the local government's contribution to the development of the private sector. The purpose of this paper was to, through the analysis of Wenzhou's experience and Yiwu's local conditions, give suggestions to better role-playing of Yiwu's government in development of its private sector and enhance the performance of private enterprises. Based on the data collected from the website of government organizations, authentic news agencies, yearbooks, some research papers and research interviews and research observation, suggestions were given in order to sustain stable development of private sector. The suggestions include emphasizing on institutional innovation, better defining governmental function sustainable and the more detailed suggestions include further upgrading "China Yiwu International Commodities Fair", attracting more exposition participants from both home and abroad and building up a good image and reputation for the fair.