This paper shows the relative position of the municipalities/provinces in China in terms of production chain or inter-regional division of labor by using Average Propagation Lengths proposed by Dietzenbacher, Romero and Bosma (2005), in the form of answering the following two questions; (１) How the production chain or inter-regional division of labor has been formed in China? Is it a form of inland regions is to support the coastal regions by supplying raw material? (２) Is the municipalities/provinces where have proceeded the industrialization and urbanization located at the position of upstream in production chain? Because the urbanized area seems to be able to supply the business services, new technology to less urbanized regions. One hand, the result of analysis support the first hypothesis of that inland region is a raw material supply area of the coastal regions, the development of coastal regions leads the development of inland region in terms of generating a demand for raw materials. However inland regions where industrialization is proceeding by the western development policy, such as Chongqing, Sichuan and Gansu is located downstream. It means that a part of inland regions is a growth pole as well as the coastal region and drive the development of around the region. One hand, the result of analysis support the first hypothesis of that inland region is a raw material supply area of the coastal regions, the development of coastal regions leads the development of inland region in terms of generating a demand for raw materials. However inland regions where industrialization is proceeding by the western development policy, such as Chongqing, Sichuan and Gansu is located downstream. It means that a part of inland regions is a growth pole as well as the coastal region and drive the development of around the region.

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