This paper summarizes the relevant policies and measures of promoting the development of manufacturing industry in the free trade zone，especially the institutional innovation of the Customs in the development of free trade zones. On this basis，through the comparative analysis of export volume of manufacturing sector，added value of manufacturing industry，value of fixed assets investment，FDI in the manufacturing industry and efficiency of customs clearance，this paper elaborates on the influence of China’s（Shanghai）FTZ on manufacturing industry. The research shows that the customs institutional innovation has a positive effect on the development of the manufacturing industry based on the example of the Shanghai Free Trade Zone，，and the influence is mainly reflected in the change of “quality”，i.e. the adjustment of manufacturing structure.