Abstract: In this article, the present situation and obstructive factors of the Chinese agricultural equipment industry were analyzed, and the development strategies, e.g., independent innovation program, improvement of the advanced manufacturing technology, optimization of the industrial structure, brand breeding strategy, and market expanding strategy, were discussed. The aims of these efforts are to fulfill the goals that in the year 2010, the net value of agricultural equipment industry should be doubled, the ability of scientific and technical innovation should be improved significantly; in the year 2020, the net value of agricultural equipment industry should increase another 50% of that in 2010, making China a strong country in the field of agricultural equipment industry. The key programs for scientific and technical innovation in Chinese agricultural equipment industry were to establish the National Agricultural Equipment Technical Research Center, incubate large and successful agricultural equipment enterprise, and facilitate collaborative innovation between small and medium enterprises, in order to improve the innovative ability of general technology, to incubate innovative enterprises and to establish platforms for integration and update of technology. Novel mechanisms for scientific/technological innovation and encouragement in agricultural equipment industry, integrating resources, as well as mechanisms for new investments, are essential to consummate policies for agricultural equipment industry innovation and long-term development.