Abstract: In order to revitalize the land stock and release the space for industrial development, the upgrading and renovation of village level industrial parks is an urgent ‘number one project’ for the Nanhai District government in the new era. The analysis of the transformation dilemma of village-owned industrial parks have guiding significance for the spatial optimization of Nanhai District. By analyzing the transformation dilemma of Nanhai industrial parks, this paper explores the mechanism that the unbalanced configuration of land development rights affected the upgrading and transformation results of village-owned industrial parks. It finds that urban planning resulted in the unbalanced configuration of land development rights among land use. In the upgrading and transformation of village-owned industrial parks, different upgrading and transformation modes implemented and strengthened this unbalanced configuration. The projects granted with land development rights are easy to promote, but the process of the projects whose land development rights have been reduced or even deprived, on the other hand, would be difficult to push forward. Based on this realistic predicament, this paper puts forward three countermeasures from the perspective of land development rights:strengthen planning authority and reduce village collective expectation, build the transfer mechanism of land development right and gradually realize fair development, establish a mechanism for balancing interests and activate market participation.