With the deepening implementation of the western development strategy, the small-scale cities in northwestern China have embarked on a track of the rapid economic and social development. Facing the bottlenecks of land, city-layout and road congestion, it is hard to achieve the city’s internal connotative growth, Developing new district is an important strategy for extension-mode development of a city. This paper elaborates the site election, function orientation and the importance of development strategy based on the features of northwestern small cities, the problems face them and national policies. The essay specifically takes the Pingdi Quan new district, Jining District, Wulanchabu, Inner Mongolia as an example and shows how these factors are used in the process of city planning.