Abstract: In the transitional period, communities in China are in the transformation from being under the sole control of the state to the statemarket dual governance. Here, the independent variable is state strategies. Community residents are reacting to the changes of the controlling powers. Three government strategies, i.e., penetrating and controlling, interacting with the market, and building communities, have been the focus of academic attention. However, most of the studies emphasize only some strategic actions during a specific stage, leading to a complex but fragmented presentation of Chinese communities. This paper focuses on the government actions in different stages since the 1980s, and uses the longitudinal community developmental perspective to examine the relations of the grassroots level government strategies and community processes. With the extended case method, the paper places Nanyuan in the macro context of transition to analyze the state strategies in the basiclevel communities as well as the formation and development of communities. The interaction of different constituents of the government, companies, community organizations and community dwellers, which has structured the dominant community networks, is the focal point of this paper. The governmental differentiated mediating/controlling actions of intervening, withdrawing, or observing reflect the government’s attitude toward the community. The position of the community in the social stratification and the nature of an event are the key variables in determining government strategic actions. An event interacts with the status of the community; the higher its status, the stronger its power to bargain with the government. The inconsistency in government action strategies has resulted in big differences in the initial reactions of the grassroots and the key factor in community common action strategies is the “communality” of the community itself. The relative stability of both behavioral strategies is from their own respective “cultural tool kit”. The difference in the logic of the grassrootslevel government and that of the community reaction is an important source of the dilemma in community governance.

Key words: grass-roots level government, strategic actions, community process, legitimate embeddedness, community status