Shen was initially trained for a career in the military. As a soldier in the Chinese army, he observed border fighting and the lives of the Miao tribesmen, which would later become the subject matter of his early short fiction stories. He began writing fiction in 1922 and wrote almost continually until 1949. He taught Chinese literature at various universities during the Second Sino-Japanese War out of monetary necessity.
Originally an apolitical writer, he suffered a breakdown after the Communist Revolution in 1949 and the subsequent restrictions on writing. He recovered by 1955, but he never again published another work of fiction. He was given a staffing post at the Palace Museum at the Forbidden City in Beijing, about which he wrote a non-fiction work in 1957. Afterwards, he also published a famous study of Chinese costume and dress.
Changhe (长河, “The Long River”), written during the Sino-Japanese War, is generally considered the best of his long fiction. Chundeng Ji (春灯集, “Lamp of Spring”) and Heifeng Ji (黑凤集, “Black Phoenix”) are his most important collections of short stories.