Cities shrinking is a major challenge for the new urbanization in China. Moreover, "flowing space" effect increasingly intensified relative city shrinkage in the process of socioeconomic transition. The Chinese central government has focused on transition of the shrinking cities with small and medium size. Understanding of relative city shrinkage, however, is currently a rudimentary and subjective issue. Hubei Province is a typical area with dense small and medium-sized cities in China. Based on these considerations, this article first presented a diagnostic framework of city relative shrinkage. Then, taking Hubei as a study area, the dynamic patterns and causes of city relative shrinkage between 2006 and 2015 were analyzed using the quantitative diagnostic method and a regression model of panel data. The results indicate that 27 cities showed relative shrinkage, which accounted for 75% of the cities in Hubei Province. Moreover, 18 cities showed strong relative shrinkage. Overall, proportion of relative shrinkage showed a spatial pattern of strong in the east and west and weak in the middle. "Flowing space" has a significant impact on the shrinkage of small and medium-sized cities. From the period of the 11th to the 12th Five-year Plan, Wuhan and Xiangyang showed continued growth. Meanwhile, cities of relative shrinkage increased from 21 to 24. Strategies of urban development presented by the 11th and the 12th five-year plans to some degree promotedcity development in western Hubei. However, within the Wuhan metropolitan area and its surrounding areas of 150 km radius, the development of large, medium, and small cities was still imbalanced. Industrial space expansion and improvement of urban construction, maintenance, and management levels played important and positive roles in controlling the relative shrinkage. Finally, suggestions on promoting coordinated development of cities in Hubei, implications for controlling the shrinkage of small and medium-sized cities, and methodology of relative city shrinkage research were discussed.