Industrial agglomeration in the Pearl River Delta of China promotes new-type urbanization. The study found that industries clustering together significantly boosts urban development in the area. The effects are stronger among cities with similar economic levels. Producer services and financial industries have the most impact on urbanization, surpassing foreign-funded and manufacturing industries. Financial industry agglomeration takes longer to show effects. Coordinated industrial clustering in local and nearby areas has a greater long-term impact on urbanization than short-term clustering.