Chinese academia has generally recognized that the proper solving of rural issues is vital to China’s modernization and long-term stability of society. In the context of new urbanization, the paper focuses on the key to China's new urbanization policy, which is “to modernize not only the city, but also the rural area”. It also explores important means to satisfy the needs for the modernization of rural areas, in terms of economy, land, management, environment, and culture. Through literature analysis, field investigation, and systematic research, it is internationally proved that proper planning, construction, and management of villages and towns can help guide the orderly and healthy development of rural areas. Therefore, to promote rural development and address the existing “rural problems”, it is crucial for China to establish a set of planning theories and methods to guide the modernization of rural areas, based on rural differentiation, diversification, and greenization. The key lies in respecting the law of rural development, building an integrated urban-rural system with urban-rural distinction, and improving the technical means required in rural development, construction, and protection. Specific proposals on the reform of village planning, construction, and management are also put forward, including laws formulation, system innovation, local design, platform management, environmental renovation, and space construction.