Since 2010, China’s economy has entered a new normal state. Under the pressure of dual economic transformation and development both at home and abroad, China needs to find a new economic model that can cope with the increasingly fierce international competitive environment and effectively promote international development. The innovation of the “Negative List” management system of China (Shanghai) Free Trade Area has had a great impact on the economy of China and the world. Therefore, this paper uses the theoretical framework of the new institutional economics to account for the market effect produced by the negative inventory management system and studies the innovative mechanism and effect of management system of China’s free trade area from the perspective of market space focusing effect.