The debate over national form dominated the ideological trend of the nationalization of literature and art after the Second Sino-Japanese War, which not only extended the disputes over new form and old form, and Chinese form and Western form, but also enriched the discussion of the popularization of literature and art in 1930s. This debate concerned not only about how to develop Chinese literature, but also about how to properly evaluate new literature and art ever since the May Fourth Movement. After the break out of the War, one of the function of literature was to mobilize and encourage the masses, and thus, the creation of a national form became a crucial question which attracted much attention. To emphasize the national form was to strengthen national consciousness, which was also required by the need of mobilizing the people during wartime. Based on the fact that both sides agreed with the necessity of creating a national form, the debate centered on Xiang Linbing's argument that "the folk form is the central source for creating a national form." This article reflects on Hu Feng's view that the debate per se was a "theoretical tragedy" and explores the two questions essential to the development of Chinese new literature and art, that is, "the transplant of the foreign form" and "the utilization of the old form." Besides, it also analyzes the theoretical values and the significance of practical guidance and expounds on the contemporary development of the nationalized fiction with Mo Yan as an example.