It is generally assumed that serious social conflicts can result from China’s rapid urbanization. This assumption is mainly underpinned by three factors: 1) conflicts between externally arranged economic development plans and villagers’ interests, 2) corruption in local governments, and 3) inaccessibility of high-quality public goods and public services to residents of urbanizing villages. Nonetheless, the assumption has been mainly countered in China. This article attempts to offer an explanation, namely that Chinese local governments have realized effective governance of many urbanizing villages with various methods. The case is derived from Guangzhou’s Luogang District (now part of Huangpu District).

Luogang District government has adopted three main methods. The first is to introduce state-supported social welfare system to urbanizing villages, the introduction that tends to have reduced villagers’ resistance to land requisitions. It is noteworthy that the government provides public goods and public services to the villagers mainly by the revenues generated from their collective assets and land, particularly from their “reserved development land” – the land that can be legally used for non-farming purposes (e.g., office buildings, factories, and storage buildings). Collective assets management and revenue distribution, therefore, have become sources of conflicts between villagers and villagers’ committee. Villagers’ consequent mistrust of the committee has paved the way for their welcome to Luogang District government’s intervention in their village governance. The second method is that of shareholding reforms. These reforms have effectively held villagers’ committee accountable by combining the supervision of district government and that of villagers as shareholders. The third method is that of intervention in elections of members of village Party committee. The intervention has enabled the district government to exert indirect influence on Villagers’ Committee and shareholding cooperatives. More importantly, it has given villagers a stronger impression of democracy and equality in the governance of their local affairs.

This case also raises three further questions about governance of urbanizing villages. First, how can minority groups’ interests be better protected from dominant groups in a kinship-based village? Second, how can a balance be struck between local state interventions and villagers’ self-governance? Third, how can villagers’ income and social welfare be better secured when their reserved development land is adversely affected by economic downturn?