Abstract: In the process of urbanization in China, there has been a long-term phenomenon that urban population is increasing with land increasing, and the rural population is decreasing but the land is not. With the establishment of the territorial spatial planning system and the proposal of the rural revitalization strategy, China's rural areas are faced with the strengthened restriction of resource elements, and the double pressure of the overall improvement of development standards. The smart shrinking is becoming a trend in the future village development. There are different types of shrinking villages. The suburban areas of the city are the main distribution areas of the restricted shrinking villages, where villages have strong development power. However, owing to the limits such as land, environment, landscape, industrial policies, the transformation and development is bounded to existing and even smaller development space. The villages' smart shrinking planning should be transformed from the construction space of unilateral attention to the global space. Not only the quality of the construction space should be improved, the value of the agriculture space should also be excavated. The stock land is revitalized, the arrangement of the space is optimized, the security policy is introduced, the long-term mechanisms and so on are established through the multiple operation of the introducing of the new industries. The dependence of the traditional development path will be broken up with low cost and low resistance, and the high quality of the transformation road will be found.