External Economic And The Formation Mechanism Rural Areas Of Industrial Agglomeration

China is a large agricultural country, the development of rural constraints economic development of China like a bottleneck all the time. At present, the rural industrial growth slowed down, one of the important reasons are its scattered layout. The theory of industrial agglomeration offers the theoretical basement for the rural industry agglomeration. The paper analysis the process and the internal mechanism of the rural industry agglomeration from the viewpoint of external economics, and exemplify a typical rural industry agglomeration,Weizhuang Town of Xinxiang City in Henan province.This paper consists of five parts:In the first part, after giving a systematic evaluation of the academic studies of industrial agglomeration, the author considers that the external economics are the micro-economic foundation and the most important mechanism of the industrial agglomeration. Then pointed out the ideas in this paper and select the case.In the second part, the paper studies the relation between external economics and industrial agglomeration theoretically. The author illustrates the classification and the character of external economies. The external economics of this paper are the decrease of cost and the increase of incomes that are caused by the relation between the enterprises and regional environment. The process from scattered location to concentration of the enterprises is the process from the weakness to strong of the external economics at the same time. The author constructs a model of relation between industrial agglomeration and external economics, and indicates that they are cause and result mutually.The third part introduces the formation and development of rural industry agglomeration. Firstly, the main reasons of the rural industry in the geographical concentration have been analyzed, and the performance in advancing of urbanization.Then analyses the process of the crane machinery in the area of the case.In the fourth part, the paper applies the model to the development of the crane machinery in the area of the case. Firstly, the author introduces the regional production systems of the crane machinery The informal institutions include individual relationship networks and the social-cultural tradition. There are several problems in the agglomeration including low value-added products, inadequate upgrade power; incomplete industry chain, upstream and downstream firms don't close; less investment in research and development, weak ability to innovate and so on.The fifth part is the conclusion of the paper. Lastly, point out the inadequacies in paper.