Based on a review on the history of urbanization in Sunan, the paper argues that Sunan has entered a new development phase of institution-led urbanization. After 30-year development since the opening and reform, there has been a remarkable development of small towns in Sunan. Some towns and townships are transforming into medium and small-sized cities and the urban-rural relationship has also fundamentally changed. In the new development phase, neither the existing administrative and fiscal systems, nor the actual institutions and policies relative to urbanization are efficient enough for further promoting the socio-economic development of this area, so institutional innovations are quite necessary. At the end, the paper puts forward certain suggestions on improving and reforming related institutions and policies for town development in Sunan.
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