This research examines government policies and urban transformation in China through a study of Hangzhou City, which is undergoing dramatic growth and restructuring. As the southern center of the Yangtze River Delta, an emerging global city region of China, Hangzhou has been restlessly searching for strategies to promote economic growth and survive the competition with Shanghai. This paper analyzes Hangzhou’s development strategies, including globalization, tourism, industrial development, and urban development, in the context of shifting macro conditions and local responses. We hold that urban policies in China are situated in the broad economic restructuring and the gradual, experiential national reform and are therefore transitional. The paper suggests that China’s urban policies are state institutiondirected, growth-oriented, and land-based, imposing unprecedented challenges to sustainability and livability. Land development and spatial restructuring are central to urban policies in China. Last, while Hangzhou’s development strategies and policies to some extent reflect policy convergence across cities in China, local/spatial contexts, including local settings, territorial rescaling and land conditions, are underlying the functioning of development/entrepreneurial states. 2012 Elsevier Ltd. All rights reserved.