Abstract: Against the backdrop of rapid urbanization, rural China is undergoing profound functional transformation and urgently requires new theoretical perspectives beyond traditional narratives. This paper introduces rescaling theory, which originated in the context of Western globalization, and systematically examines its value and limitations for understanding rural transformation in China. Although rescaling theory has inherent advantages in explaining the dynamic reorganization of cross-scale power, capital, and social relations, its market-economy origins and macro-scale descriptive tendency create challenges when it is applied to China's rural functional transformation. It faces theoretical adaptability challenges caused by institutional contexts and operational challenges caused by scale shifts. The paper therefore explores the main challenges and issues involved in applying this theory to China's rural functional transformation, and integrates it into an analytical framework of rural territorial rescaling based on the three dimensions of power, capital, and society. The framework aims to reveal how external forces and endogenous structures jointly shape rural spaces through scale struggles and embeddedness during rural transformation.