Urbanization is an important indicator of a country’s degree of modernization. According to the World Urbanization Report by the Department of Economic and Social Affairs of the United Nations, more than 55% of the world’s population lives in cities, with this figure projected to rise to 70% by 2050 (United Nations, 2018). China’s urban population accounts for 60% of the national total in 2020, and is expected to reach a very ambitious rate, 80%, by 2050 (Deloitte, 2018). More people living in cities means more contests over limited urban resources, such as water, housing, transportation, education, and health care. To cope with the challenges brought by the urbanization trend, David Bollier from the University of Southern California raised a new idea for city planning: a comprehensive network and applications of information techno-logies (Bollier, 1998). IBM later echoed the idea and initiated its Smart Planet vision in 2008 (Palmisano, 2008). At that time, it was a brand new concept to empower and transform urban infrastructure, services, and management. Quickly afterwards, the smart city concept has been adopted by major cities throughout the world, and it has gradually evolved into a strategic choice by ambitious cities—aiming to compete for urban development, and to provide easy-to-use but efficient functionalities. In this paper, we discuss the essence of a smart city, investigate three driving forces of smart city development in China, summarize the key features of smart cities in China and other countries, and raise four big challenges that deserve careful thoughts on building future smart cities.