The feature of Yiwu economy lies in the commodity wholesale market, which was founded in 1982. After over-20 years¡¦ development, Yiwu has formed a market system characterized by China Small Commodity City as the centre, as well as a range of supplementary factor markets such as transportation,property right, labor force, etc.. This thesis primarily concentrates on studying the economic development of Yiwu. How does the process of transforming form a traditional market fair to an international wholesale market city? Why does the wholesale industrial clusters in this city? What is the advantage of wholesale industry in Yiwu? The local government of Yiwu plays a considerable role in the process of developing economic by means of appropriate policy and privatized The Zhejiang China Small Commodities City Group, cultivating an environment for wholesale commodities trading center.