The decision adopted by the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China clearly stated: to optimize the setting of administrative divisions, and to basically realize the modernization of the national governance system and governance capabilities by 2035. The establishment of administrative divisions is an important institutional plan for national regional governance. The government implements effective administrative management of various regions through hierarchical and block-based regional divisions. Based on the perspective of spatial political economics, the research uses new economic geography theory, scale economy theory, and regional economic coordinated development theory to establish regional economic development spatial planning system (administrative division setting) and urban economic development goals ( The theoretical analysis framework of the mechanism of economic density). The administrative division system includes design and planning in two dimensions: hierarchical and block-based. On the one hand, the functional power and financial scale of cities at different levels are determined through the setting of the administrative level of the city, and a gradient urban hierarchy within the region is established; Coordinate the contradictions between urban economic densities, and realize the government’s planning, design, and policy guidance for the future development of regions and cities by means of resource allocation. Based on theoretical analysis, the study puts forward research hypotheses on the impact of administrative division settings on urban economic density from the three dimensions of administrative level, city size, and size. The study then uses the panel data of prefecture-level and above cities in China from 2003 to 2017 for empirical testing, and further verifies the research hypothesis through robustness testing, endogeneity testing, mediation effect, and threshold effect analysis. The research found that: administrative level has a significant impact on the increase of urban economic density, and the promotion of administrative level to urban economic density is mainly realized through the two dimensions of government power function and financial capacity; the relationship between city size and urban economic density presents a positive N-type When the population size of the municipal district is between 470,000 and 1.05 million, due to the inconsistency between government governance and the expansion of the city, it shows that the city size has a restraining effect on the urban economic density; the size of the city has a significant effect on the urban economic density. Finally, the study puts forward the following policy suggestions for improving urban economic density through administrative division setting: attach importance to the matching relationship between administrative levels and urban economic development, and coordinate the relationship between the two to promote regional and urban economic and social development; reform and improve the urban scale control system and mechanism,optimizes the problem of diseconomies of scale in urban development; from the perspective of national strategy and top-level design, the planning of the city’s scope is fully optimized, and the urban spatial layout is fully optimized to achieve efficient agglomeration .