Small towns are important drivers for China's urbanization, but at the present they have no autonomy in
deciding whether or not to sell their land, what the planned future is, how urban land will be developed,
whether or not to borrow and/or raise funds from the financial market. The public services and facilities
such as schools, hospitals, cultural and community centers, and public housing are usually poorly
developed in small towns, failing to meet the basic needs for urban growth. As such, both the development
of rural China and the broader urbanization and modernization processes are checked by
inadequate power of decision-making and poor services in small towns. This paper advocates the
designation of a new type of city in China, i.e. “county-serviced city” (CSC, xian guan shi), to qualified
small towns within the existing administrative hierarchy. The CSC will have the same rights as all other
Chinese cities in dealing with their economic development, but it will remain in its current position as a
township level unit in the administrative system and continue to be served with social services and
public goods by its county government. The paper is presented in seven sections with an emphasis on the
principles of “decentralization” and “small government, big society”, the experiences in other socioeconomic
and cultural contexts, and a scenario of status-change in Nancun township, Qingdao, Shandong
Province.