It is recommended for economists to examine China s Urban-Rural disparity from the perspective of transaction efficiency, in that it can provide us with a systematic explanation to both the cases of different countries and development stages. China s Urban-Rural disparity is special and virtually a demonstration of its special transaction efficiency structure. Exploration of China s Urban-Rural disparity from such perspective indicates that, different from those in countries with a market economy, China s case involves many exogenous and contrived factors. Therefore, the solutions are to improve the whole transaction efficiency in the economy, which includes eliminating its regionally unfavorable policies and institutions, and enforcing more favorable and regionally balanced institutional reforms.