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Based on the theory of local state corporatism, the state-centered approach, which emphasizes the importance of state autonomy, was applied to explore the evolvement of rural industry. From the viewpoint of the relationship between state and society, the author explained why the local government and farmers were able to promote the development of Township Village Enterprises (TVEs) and rural economy in 1970s¡¦. Basically, the evolvement of rural industry in China was derived from the thinking of state industrialization and modernization. It has changed three times since the establishment of People¡¦s Republic of China. During the periods of Mao and Deng, though each change was due to the different situations or strategies, the fundamental philosophy were the same. The central government ¡¦s policy, the reform of rural economy, and the effective decision and control of local government were the major factors for the development of TVEs and the change of property system in 1980s¡¦. In short, local state corporatism was a makeshift device for the local government to control and divide resources with administrative powers to pursue desired political, economic and societal goals. It formed a system in which the cadres of the Communist Party, the officials of government, businessmen and farmers were united to achieve these goals. Under the autarchy of Chinese Communist Party, this kind of political-oriented economy reform in rural areas changed dramatically the interrelationship between state agents and social organizations and rebuilt a new model for such interactions. These experiences would have a great deal of implications for the underdevelopment countries of the third world.