Over the past two decades, various economic zones in Mainland China have been rapidly growing under the market opening and modernization policies. Among those zones, shanghai, Jiangsu, and Zhejiang have limited land and natural resources. These areas are the most outstanding performers regarding GDP growth and competitiveness. The high economic development performance is not without problems and issues. The concerns include intergovernmental interactions, coordination, operation, conflicts and challenges. They deeply affect the sustainability of the area’s growth, and these should be taken seriously. This paper attempts to offer a perspective from intergovernmental relations, including the government’s role and behavior as the markets transform. The paper also includes comment on intergovernmental conflicts, integrations, and challenges. The new central government leadership style of Hu jin-tao and Wen jiao-pao is more inclined to overall, evenly-distributed economic development policy. Under this policy, there are plans to revitalize China’s East-North industrial zones and Zhu River Delta are consolidations. Therefore, Shanghai’s role as the center of Yangtze Delta could be challenged. With this background, Shanghai needs to make more effort to positively create a “co-opetition” environment in order to sustain its navigator role. Traditionally, shanghai and Zhejiang have storing historical ties in emigration, trade, actual cooperation and good will. To the contrary, Shanghai and Jiangsu have had relatively strained relations. Therefore, it is expected that this “co-opetition” relation could spill over into economic benefit. The negative, vicious completion and low level, poor quality, redundant construction among Yanbgtze Delta provinces should be removed in a short time period. The key solution would be to establish a fair completion system based on market rules and a central government coordination mechanism.