In present Taiwan society, ethnic issue is the most sensitive and unavoidable issue. The ¡§Taiwanese - Provincial¡¨ concept divides people in Taiwan into two ethnic groups, and these two groups have different ethinic memories and specific political attitudes. But the classification isn¡¦t preexistent. People learn to recognize the society and political affairs in Taiwan by using ¡§Taiwanese - Provincial¡¨ concepts when they grow up with political socialization. Some people consider that KMT regime give Provincial some preferential treatments in economic side. Therefore, the article hopes to depict the basic appearance of ¡§party-state system¡¨ by KMT regime, and find the provincial discriminating system in economic side under the special historical background. Furthermore, the article hopes to find the relationship between the Provincial ethnicity construction and the discriminating system. The research detects KMT regime constructed provincial discrimination in economic side after withdrawing to Taiwan and building party-state system. KMT regime constructed these discrimination and enforced the historical memories of ¡§withdraw from mainland China¡¨, and made separate provincial crowd forming the ethnic consciousness of ¡§Provincial¡¨. Finally Provincial become a new ethnic group, and inter-verify with ethnic theories