Abstract: It is one of the major development problems that China is facing at present to maintain the sustainable development of industrial economy and green development at the same time. To this end, this paper attempts to provide a realistic economic explanation for "environmental regulation - industrial economic development". The study found that environmental regulation is an important factor affecting the development of industrial economy. The lower and higher environmental regulation intensity is not conducive to the development of industrial economy, and the appropriate environmental regulation intensity can form a "reverse effect" to enhance the industrial economy; local government The performance appraisal pressure does not necessarily detract from the effectiveness of environmental regulation. Moderate local government officials' promotion pressure can stimulate environmental regulation potential and promote industrial economic development. When local government fiscal revenues and expenditures are basically balanced, the environmental regulation policies implemented will be close to the most Excellent "level" to promote industrial economic development; suitable fiscal decentralization is conducive to the government to free limited energy from "how to generate income", which is conducive to environmental regulation approaching "optimal" level.

Key words: Environmental Regulation, Industrial Economic Development, Local Government Behavior, Threshold Model