From the perspective of reducing the administrative cost, the mainstream views tend to weaken the status and the function of prefecture-level city in China. In contrast to the mainstream views, the paper, based on the perspective of Economics, discusses that the economic status of the prefecture-level city should be reinforced instead of being weakened, in order to make it become the regional subcentre of each province, the main carrier of industrial and commercial development in the process of urbanization, and the main transfer destination of rural labor force employment. To achieve this goal, the government needs to give guidance from several aspects such as industry, capital, resources, market and system. It also needs to promote the industrial development of the prefecture-level city and absorb a sufficient amount of rural labor force working and settling down in the cities.