Abstract: Since the economic reforms in 1978, China embarked on rapid economic growth and resumed urbanization process. The new era brought great changes to traditional social structure in rural areas, making it necessary to advance the systematic study on the issue of governance. Centered on the theme of urbanization, this study investigated new emerging issues on rural governance in Huai’an, Jiangsu, and discussed policy suggestions as solution. Our results showed that major challenges in rural governance include weakening governing agencies, scarcity of governing resources, conflicts with traditional ideology, and weakening legitimacy of rural governance. All these have severely limited a coordinated governance of both urban and rural societies. Addressing these issues, this paper proposed to strengthen governing agency, provide more social resources, reduce conflicts in ideology, and strengthen the legitimacy of rural governance.