Over the past two years, the term “Lewis turning point” has become a hot topic. The term refers to when the agricultural labor force can no longer provide sufficient labor for the industrial sector. This is when labor costs start to rise. China does not actually face a Lewis turning point at the moment. There are two reasons for this. First, there is still plenty of unspent labor in China’s countryside. Second, the precondition for the Lewis turning point is that the population can flow freely, but in China this is not the case. In the modern economy, with the development of secondary and tertiary industries, the process of urbanization is due to accelerate. A good urbanization policy can improve economic efficiency, and a bad urbanization policy can hinder economic development. This paper reviews the current urbanization policy by analysing theoretical and practical data.