This paper is to describe the characteristics of the Small Towns development in Rural China. The policies to develop Small Towns have been induced for solving the problem raised during the rural reform. The changes and adaptations of rural reform processes are integrated in Small Towns. The characteristics in the process of development of Ronggang, a small town, are as follows. First, it was the fund raised by rural inhabitants that was used for construction and development of the small town, Second, by implementing the policies of selective migration, the inhabitants of the small town have been differentiated from those of rural region. Third, the activities of commerce and industry of Ronggang have progressed to joint-stock system. Fourth, Having the spatial characteristics of self- development, the small town has grown and is expected to grow higher hierarchy of settlement system.

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