Abstract:Urbanization is the inevitable trend for China’s society. Small and medium cities (SMCs) are the major part of China’s urban and town system. SMCs are also the major part of absorbing urbanized population. At the present time, China’s big cities face many serious problems which are called "big city diseases". Compared with big cities, small and medium cities bear a lighter burden. Small and medium cities can learn the lessons from big cities and solve these problems easier in their development process; SMCs are the hope for the sustainable development of China’s urbanization. To SMCs, which are in the middle spectrum of urban and town system, not enough attention is paid by academic circles and decision-makers. In the research on China’s urbanization and development strategy, two questions need special concern, one is how to improve the ability of cities to absorb rural population; the other is how to raise the development and operation efficiency of cities. Quantitative research on the behavior efficiency of urban spatial structure, population & goods flow forms, community pattern, etc. with urban energy metabolism process as the core is very essential; and the discipline of urban efficiency can be constructed to provide scientific support for China’s urbanization development.