Rapid and far-reaching development transition has triggered corresponding restructuring in rural China especially since the turn of the new millennium. Recently, there has been an increasing trend emphasizing regional resources in formulating rural development policy and restructuring rural areas. This paper analyzes the rural restructuring in China affected by the allocation and management of critical resources including human resource, land resource and capital, by establishing a theoretical framework of “elements-structure-function” of rural territorial system. It is argued that rural restructuring is a process of optimizing the allocation and management of the material and non-material elements affecting the development of rural areas and accomplishing the structure optimization and the function maximum of rural development system. Due to the constraints from the maintained urban–rural dualism of land ownership and household registration, the rapid rural restructuring under both globalization and the implementation of the national strategies on industrialization, urbanization, informatization and agricultural modernization, the changes of the allocation of critical resources have brought about many problems and challenges for the future development of rural China, such as the nonagriculturalization, non-grain preference and abandonment of farmland use together with the derelict and idle rural housing land, the weakening mainbody of rural development, the unfair urban–rural allocation of capital and its structural imbalance, and so on. Aiming at how to resolve the problems and adapt to the challenges, it is pivotal to restructure the rural development space, rural industry, and rural social organization and management mainbody. Furthermore, it is necessary to restructure the contours of state intervention in rural societies and economies and allocate and manage the critical resources affecting rural development, from the perspectives of integrating urban and rural resources, improving the efficiency of resources utilization, and fully understanding the influences of globalization on rural restructuring in China