Abstract: From the perspective of sustainable development of innovative enterprises, this paper discusses the effectiveness of CGEM review system as well as its reconstruction direction. The CGEM provides financial support for the financing of innovative enterprises. But after listing, the enterprises' technological innovation ability and profit growth don't increase significantly, which means its sustainable development capacity is insufficient. One of the main institutional reasons is that the substantive examination under the Approval System is controlled by the government, making rent-seeking possible. Because of the Resource Effect and the Extrusion Effect, the sustainable development of innovative enterprises is weakened. One solution to this problem is to change the Approval System to the Registration-based System, return the listed resource allocation rights to the market and transfer the focus of government supervision to information disclosure and post-event control.