Abstract:To distinguish regional advantages of industry, regional competitiveness of industry and regional structural advantages of industry, this paper sets up a new benchmark for the selection of regional leading industries, based on an improved Esteban Model of Dynamic Spatial Shift-Share Analysis. Again, it shows the spatial autocorrelation test and the application of three-dimensional diagram analysis in leading industry selection, taking Zhejiang Province’s manufacturing industry as an example. Finally, comparing policy suggestion from the theoretical model with the actual choice of leading industry in Zhejiang Province, it verifies that the leading industry of Zhejiang’s manufacturing industry during 13th-Five-Year should includes animation, press and publication, stationery and sports goods manufacturing industry; fashion and apparel industry; fashion leather manufacturing industry; fashionable household goods industry; new energy vehicles and battery industry; air and rail transportation, high-end of the ship and marine engineering equipment industry; new material industry.