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Sustainable territorial spatial development faces severe challenges globally, especially the threats from rapid urbanization. It is important for territorial spatial planning in the new era to explore the principles, methodology and models for the territorial spatial optimization aiming sustainable urbanization from global and national perspectives. This paper rethink the spatial optimization for sustainable development by reviewing the literature on urbanization, spatial optimization and sustainable development. The results show that there is no readymade path for sustainable territorial spatial development, and sustainability should be the fundamental objective of territorial spatial optimization. Cases from the globe and China show that urban sprawl tends to make cities disperse, decline population density, and fall in a path dependency. Cities should be laid at the core of territorial spatial optimization. Chinese sustainable urbanization should be characterized by compact development, high-density, livable urban development, and low carbon. The concepts of sustainable urbanization oriented territorial spatial optimization include ecological protection, resource saving, intensive development, and green development, which forms the path of sustainable territorial spatial development. The modeling of territorial spatial optimization can be reconstructed from index system and quantification, setting of objectives, and constraint rules in a multi-objective collaborative optimization model. In this paper, we conclude that China has to build her own way of sustainable spatial development in accordance with the conditions of the nation, promoted by territorial spatial optimization with sustainable urbanization as a core. [ABSTRACT FROM AUTHOR]