Abstract Based on the data of 27 double-digit industrial segments from 1992 to 2018, this paper measures and analyzes China’s industrial inter-regional transfer, and uses Theil index to measure and analyze China’s regional economic gap. Also a panel data econometric model is built to verify whether the industrial inter-regional transfer has narrowed the regional economic gap. There are following findings: (1) Since 2004, China’s industry as a whole has been in a two-stage decentralized transfer. The central and western regions are the main undertaking regions in the first stage and the main gathering regions of labor-intensive and resource-intensive industries. And the southern and eastern coastal areas are the main undertaking regions in the second stage of decentralization and transfer, and the main agglomeration areas of moderately intensive industries in technology and labor technology. In the industrial transfer, the northern region has benefited less, the industrial gap between the northern and southern regions has widened, and the industrial center has gradually tilted toward the southern region. (2) Since 2003, the economic gap between the eastern, central and western regions has gradually narrowed. However, in recent years, the economic gap between the northern and southern regions has expanded significantly. The economic gap between the northern and southern parts in the eastern region mainly leads to the expansion of China’s overall economic gap. (3) Although the decentralized industrial transfer has narrowed the economic gap among the eastern, central and western regions, in the regional game of undertaking industrial transfer, the northern region has benefited less which results in the fact that the economic gap between the north and the south has gradually widened. At the same time, it has also gradually enlarged the economic gap between the northern and southern regions. (4) In addition to industry, the development of service industry is also a main factor affecting the regional economic gap. The role of the service industry development in narrowing the economic gap between the eastern and western regions, and between the northern and southern regions is greater than that of industrial transfer.