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Since traditional Cobb-Douglas production function cannot be supposed to great fluctuant data, this paper uses grey system GM(1,1) model to pre-deal with the raw data and establish grey production function model (model G-C-D) based on the GM(1,1) simulated sequences. This model is used to empirically analyze the role and its change of contribution factors (labor force, investment, technology progress) of Southern Jiangsu economic development from 2000 to 2007. Result shows clearly that technology progress factor is accounted for 50% above, but with a declining trend. However, capital factor shows obvious ascending trend. Finally, it explains this result and makes suggestions.