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Abstract China has now entered the stage of rapid urbanization. As an important spatial entity of new-type urbanization, an urban agglomeration has played an extremely important role in economic development and future urbanization. However, at present, in China's urban agglomeration,s there exists a serious problem of inadequate coordination in development with unequal exchange of factors between urban and rural areas. The capacity of resources and environment in large cities is limited while small and medium-sized cities and small towns are underdeveloped, and are caught in a vicious circle of economic inefficiency and waste of resources. The rise of characteristic towns has made it possible to break through this vicious circle and to explore a new model for small towns to serve urban agglomerations. Compared with traditional small towns, the characteristic towns not only feature the ″production″ concept with industrial development, industrial transformation and upgrading as the focus, but also feature the ″life″ concept of facility and service improvement and the ″ecology″ concept of improving the quality of human habitat. Adhering to the policy objective of ″three-concept integration″, the characteristic towns have both industrial support and employment attractiveness, which will maximize the ″production-city integration″, change the trend of excessive resource accumulation into large cities, and break fetters on the factor flow in the urban-rural dual structure. This is a huge boost to the formation of a new pattern of urban-rural interaction and regional integration within the entire urban agglomeration system and promotes the high-quality development of new urbanization. Based on this, this paper takes Zhejiang Province as an example and applies the theory of interregional divergence in categorizing the characteristic towns under construction into ″central″ towns, ″satellite″ towns and ″special″ towns according to their spatial layout. The paper elaborates on the spatial layout and functional differentiation of different types of characteristic towns based on the policy objectives of integrating production, life, and ecology: the ″central″ towns located in the central cities or important node cities are attracting high-end professionals while developing industries with high added value. They will ultimately complete industrial upgrading and ″gentlemanization″, and enhance the radiation capacity of the central cities. The ″satellite towns″ located on the outskirts of the central cities and within the metropolitan area will take in the industries and population of the main urban districts, attract labor from their surrounding villages and towns, thus expanding the radiation range of the central cities, and solving the problem of ″residence cities″. The ″special towns″ located in the development zone between urban agglomerations will take advantage of their natural resources or historical industrial foundation to promote the transformation and upgrading of traditional industries and attract labor to return. They will become new growth poles in the urban agglomeration in leading industrial development in their surrounding areas.
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