Abstract: The rare earth industry, an important pillar in Ganzhou city, plays an important role in promoting the economic development of the Gannan area. Based on Krugman's generalization of externality to define industrial harmony, namely: the industry specialization of economic development, labor market economy prosperity and knowledge spillover causing significant labor mobility, industrial relevance and spillover effect to promote technological upgrading and quality upgrading of related industries, and then to promote industrial positive externalities.The effects of externality and upgrading of the industrial structure adjustment are analyzed to describe the issues of industrial harmony with the consideration of negative externalities of industry on resources and environment. The analysis of rare earth industry in Ganzhou shows low value-added products, excess capacity, middle enterprise resource waste, serious environmental pollution and a series of disharmonious problems, and the paper puts forward suggestions based on the theory of ecology and the advanced experience on the rare earth strategy in developed countries to promote the harmonious development of rare earth industry in the city.