According to the hypothesis that changes in transaction costs were proportional to geographic distance, an equilibrium model was essablished on cotton producing area, garment processing area, clothing needs of the market place, which could maximize the largest utility of producers and consumers and calculated the optimal location of garment processing industry. The position of the optimal location was decided by transaction efficiency and population proportion of the demand market. According to the results, then the analysis was maken on the data of Yearbooks in recent ten years. The analysis indicates that the proportion of textile and garment processing industry in these regions is closely related with the density of local markets and traffic. This result provides a theoretical basis for the feasibility on textile industry shift from east to west.