Industrial cluster is perhaps in the most chaotic and fashionable phrase in China's regional development today.There are alternative prevailing opinions on Chinese development of industrial clusters.The first is spatial proximity-to get the scattered firms together in the industrial parks.The second is to forge and elongate industrial chain.It eludes two basic questions,does geographical proximity surely benefit for enhancing the industrial and regional competition;must industrial chain be made in its region.After reviews the relative internal and overseas literatures and analyzes the cases of our country,the paper puts forward that,in order to enhance the regional and city innovation competence,we should not only pay attention to the geographical proximity of industry,but also improve forming and enhancing the industrial linkage.It includes the industrial linkage that has close range and that has far range but close linkage.It is harmful to confuse industrial cluster with industrial park and regard the development of industrial cluster as the construction of industrial chain.