It is argued in the literature that industrialization and the development of tertiary industry are the major driving forces of urbanization.Few,however,is known about the implications of institutional forces upon urbanization.In contemporary China,the local governments play a more active role in urbanization because of the intensified competition which results from the decentralization and the pro-growth policies of the central government.There are many “new districts”,de facto new cities built by the local states.Hebi city,a mining city in Henan Province,is taken as a study case to investigate a new type of urbanization in urban China,i.e.local state-oriented urbanization.In 1992,many development zones were built in order to attract the FDI.Accordingly,a new city has been built-up beside the old area of Hebi.This paper explores the role of the local states and the motivation mechanism of this new type of urbanization by analysis of the policy process.Through intensive interviews as well as an anthropological fieldwork in 2007 and 2008,it is found that local government endeavor intentional to construct the new city for to transfer population and sectors from the old city.It is disclosed that a branch of institutional strategies including administrative-boundary adjustments,new-office-building constructions and infrastructure optimizations have been successfully implemented by the local governments.As such,local government plays a decisive role in the urbanization of Hebi.It suggests that institutional forces will have important impacts upon urbanization in China.As a result,the new city has great implications on the economic and social development of Hebi city,and also has the development problems associated with the urbanization in resent years.Through the comprehensive evaluation of urban sustainable development,it is found that urban development is taken on sustainable as a whole because of the effects of the old city.However,it will be hard to sustain if the new city can’t be strong enough in the future.