Town development significantly drove China's rural industrialisation and urbanisation forward during the 1980s and 1990s. This article examines the state-led development of model towns since the early 2000s. A case study of Guangdong province demonstrates that all levels of the government administration system have been involved in the establishment of model towns, forming a state-led development framework from "above". As is evident in the state-led framework, prefectural and county governments control the development even though the central and provincial governments have established major development programmes and organised local governments to implement them. Government interactions have therefore resulted in diverse development paths with varying effects among regions. While state-led development has involved industrialists as a crucial force, it has largely excluded forces from "below", such as village collectives and rural migrants.