This paper examines the relation between political turnover and cash holding of listed-firms in an emerging market.Using a hand-collected dataset on changes of secretaries of municipal Party Committee(city heads)in China,we find strong evidence on political turnover is negatively associated with firm cash holding.This relation is more pronounced when the firm is privately-owned,when government quality is lower,when the city head is locally promoted,and when the city head is younger,which is largely consistent with a state expropriation story.Furthermore,we find that in reacting to political turnover,firms protect their cash from the risk of state expropriation by dissipating more dividends and allocating more investments on intangible assets.Our findings provide new insights on the political economy of firm financial policies in transition economies.