In order to understand the historical origins of encircling the cities from the rural areas implemented by the Communist Party of China and the current dual structures of urban and rural development, urban-rural differences are analyzed from the four aspects of production mode, management mode, culture and social division of labor. Industrial development in modern times has promoted the modernization of urban production in China. But the rural areas still maintain their traditional self-sufficient natural economy. After the Opium War, the process of modernization of city politics is promoted by more economic elements of capitalism and the formation of Chinese bourgeoisie. During the management of urban modernization, rural areas still adopt the traditional self-management mode. In the aspect of culture, city is the center of development, having large population, developed traffic, and prosperous culture. But the village is lack of information and its culture is relatively backward. In modern times, affected by the foreign capitalist, urban area has become the center of modern productivity. After separating from agriculture, handicraft industry has transferred into urban areas and the social division of labor in both urban and rural areas has shown great changes. Thus, a new pattern of “Urban Industry, Rural Agriculture” has formed.