With the increase of aging populations, China will inevitably see at least a partial social shrinkage phenomenon. From the public policy perspective, China needs to recognize objectively that not every administrative region can sustain its growth. In some areas where social shrinkage is very serious, a development strategy of recuperating and merging residential areas can be adopted to make room for the restoration of ecology. In addition, the economy of the real economy, manufacturing industry and service industry should be strengthened, and the policies for relaxing population, household registration and immigration should be adjusted.