["International Journal of Urban and Regional Research, EarlyView. ", "\nAbstract\nWhat is distinct about Chinese urban governance? Classic theories predict that when the central state retreats from resource allocation, capacity‐strained local governments must form alliances with non‐state actors, thereby diluting state power. In China, however, state power remains dominant despite decentralization. Analytically separating the Party from the state reveals that continued predominance of the party‐state rests on a threefold configuration: (1) local governments do form alliances, but top‐down, campaign‐style mobilization through Party institutions can dissolve alliances and discipline bureaucrats; (2) this hierarchy of control ensures that local officials prioritize upward accountability over local alliances; and (3) anticipating the fragility of alliances, local states anticipatorily build capacity to obtain steering power over their local partners. I call this configuration ‘party‐state urbanism’ and demonstrate it through a case study of Shenzhen. Initially lacking infrastructural power, the municipal state allied with indigenous villages, tolerated their autonomy and delegated governance duties while gradually expanding capacity by co‐opting village institutions. This allowed the municipal state to subordinate the villages at low political cost when Xi Jinping's anti‐corruption campaign turned bureaucrats against villages. I conclude by underscoring the importance of party politics for understanding urban governance in China and beyond.\n"]