In order to evaluate three state-endorsed projects of township reform, this author chose three representative towns － one form each type of project. Ther results of the study found that in realizing state guidelines, all three towns nevertheless contradicted state policies in terms of bureaucratic jurisdiction, finance, and land transference. This study is based on my fieldwork with B, C, and X Townships (all located in Hebei Province)from October to November of 1997. In accordance with state regulations, Township B built ten marketplaces with stalls for lease. In order to maximize rent, however, the township does not interfere with stands selling pornography and other illegal items, a negligence that causes it trouble with several ministries in Beijing. In order to finance its own collective enterprises, Township C has created its own bank which pays high interests in order to attract deposits, a practice in contradiction with state regulations. Finally, Township X has used its collective land to invest in a health club. It did not bother to follow the law and first "nationalize" the land for commercial use. By avoiding these central government regulations, Township X thus appropriated the share of rents due to its superior governments. This study concludes that three key variables are important for understanding local political economy;interpretations of the property rights of agrarian land, the portfolio of lthe economically influential locals, and the distribution of profits resulting form land development.