Abstract: Because of the deep-seated history and the geographical advantage, jade industry in Yunnan Province is always ahead of other regions in China. When people think about jade, they think about Yunnan. However, in recent years with developed jade industry cluster by advantages in labor and resources, Guangdong has a better momentum of development in jade industry. In face of the severe situation, Yunnan province should adjust the development strategy of jade industry to maintain the sustainable development. At the beginning this paper makes a horizontal comparison about the development history and status between Yunnan and Guangdong province and a vertical comparison about the competitive advantages between two provinces. Then based on the comparison with Guangdong province, this paper explores the advantage and disadvantage of every links of jade industry chain in Yunnan. At last this paper gives policy recommendations for the sustainable development of jade industry in Yunnan.