Of all the institutional changes made in socialist China’s current economic reforms,the establishment of systems for the transfer and compensation of land use rights must be among the most profoundly influential,because they provide one of very few basic incentives that power the phenomenal urban spatial development in this country,and largely transformed it from a centrally planned process to one that primarily obeys the logic of capital accumulation.Parallel to this marketization of urban space,local governments have become more aggressive and competitive in the urban redevelopment process with their administrative and financial powers.Meanwhile,industrial groups,with the power to organize SOE’s assets,have proved to be another critical actor which structures the redevelopment of old industrial sites for more economically intensive usage during the process of structural and locational reshaping of industries.This paper reports on an empirical study carried out in Guangzhou’s Jinhuajie industrial area,which had recently been converted to non-industrial uses.We try to show how the local government and an industrial group competed and compromised in the redevelopment process and finally reached an agreement on revenue allocation –industrial groups redevelop land,local government enjoy land lease payment and social benefit.We believe that this power structure is also largely true for other regions and other types of land controlling agents in socialist cities.