The construction of characteristic towns has been popular in recent years. These towns are trying to utilize their distinctive features to create competitive advantages and foster local economic growth. Among all types of towns, its evident that significant opportunities exist for developing tourism-focused characteristic towns in China. This paper's primary case study centers on Yangzhou, a town renowned for its rich tourism tradition in China. Also, a comparative case of Xi'an provides insights into the operational patterns and strategic advantages in tourism development. Methodologically, a hybrid approach is employed, including direct observations and a tailored survey to assess the impact of tourism on Yangzhou's residents. The findings from this research are anticipated to offer targeted recommendations for enhancing tourism development and resident satisfaction in characteristic towns like Yangzhou. Overall, this essay provides a comprehensive analysis of the factors contributing to the success of characteristic towns in China, with a focus on tourism, cultural and technological integration, and sustainable community development.