With the establishment of labor market of China, market is playing a more and more important role in allocation of human resources. However, with the transition of economy in China and industrial upgrading in recent years, many labor problems have occurred which do harm to the sustainable development of local economy. The paper researches on the labor market issues of China from the perspective of local labor market regulation. Firstly, it reviews the theories of local labor market regulation. And then the main components of local labor market regulation of China are identif ied and the evaluation index system is established. The results of analysis of the calculated output show that (1) the local labor market regulation of China has an obvious character of gradient distribution geographically and decreases gradually from east to west; (2) of all the regulations, the regulation of the development of human capital has the most signif icant impact on local economy currently which is followed by the regulation of labor relation and the regulation of market participation. As to the regulation of social security, it has no signif icant impact on the development of local economy. With the establishment of labor market of China, market is playing a more and more important role in allocation of human resources. However, with the transition of economy in China and industrial upgrading in recent years, many labor problems have occurred which do harm to the sustainable development of local economy. The paper researches on the labor market issues of China from the perspective of local labor market regulation. the results of analysis of the calculated output show that (1) the local labor market regulation of China has an obvious character of gradient distribution geographically and gradually gradually from east to west; (2) of all the regulations, the regulation of the development of human capital has the most signif icant impact on local economy currently which is foll owed by the regulation of labor relation and the regulation of market participation. As to the regulation of social security, it has no signif icant impact on the development of local economy.