Abstract: While it increases the inertia of the grid-connected system, the virtual synchronous generator (VSG) also brings about the problem of active power oscillation under the grid disturbance. For this reason, a VSG control strategy and system model reduction method that brings in the transient electromagnetic power compensation are proposed. A closed-loop active power small-signal model of the system is established. The root locus method is used to analyze the influence of transient electromagnetic power compensation on the power stability of the VSG, and the transient damping strategy is compared; further, by removing the least influence item on the system stability from the small-signal model, the order is reduced to obtain the equivalent second-order model of the system. Based on this second-order model, the quantitative design criteria of the system parameters are given. The proposed introduction of transient electromagnetic power compensation strategy increases the transient equivalent damping of the system without affecting the primary frequency modulation characteristics, and does not cause a large overshooting of the output active power. The simulation verification and theoretical analysis results are consistent, which proves the effectiveness and correctness of the system control strategy and the model reduction method.