this paper verifies the explanation utility of M.E. Porter’s diamond model and the interaction effect among its factors in China's design sector applying dual structure equation models with Likert Scale data based on actual performance and importance evaluation of the sector. Analysis reveals that in China's design sector there exists no factor-driven and investment-driven stage; and there is significant interaction among the 4 determinant factors in two diamond models, but more significant interaction among the 4 determinant factors and government is existing in the important evaluation model. both models can explain the China's design industry's competitive advantage, but the government's role is a decisive factor in the important evaluation model, and not in the actual performance model, validates the government's direct role, which is necessary to improve competitive advantage through innovation-driven.