The long-term economic growth and wealth accumulation has pushed China's economy to a new stage: the increase of various kinds of factor costs swallowed up profit margins of China when it used to be "world factory", making it hard for many labor intensive enterprises to sustain in Chinese market. Is it true that Chinese industrial development can only move or shut down facing such a situation? The answer is no. In Haiyang, Shandong province, the local enterprisers created a new development mode of very traditional textile industry, which is called the “Haiyang Mode”. They find new development space in the low profit link at the bottom of the “smiling curve” and created “Haiyang Mode” which is an innovative development of traditional industry.