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China’s shift from a socialist to a market economy has resulted in deindustrialization and the emergence of industrial heritage. Despite extensive research on state-led (re)development, limited knowledge exists on the changing role of state work-units (SWUs). Based on the case of Dahua 1935, the research reveals how the top-down production of art districts reshapes traditional work-unit urbanism. It also offers new insights into the gentrification of industrial neighborhoods under the combined forces of the state, SWUs, and private developers. The research finds that the gentrification of industrial neighborhoods cannot be fully captured by either art/artist-led gentrification or state-led gentrification. The changing role of Dahua company from a social provider in pre-reform China to an entrepreneurial and predatory organization in post-reform China has contributed to the remarkable urban transformation. The tension between socialist legacies and capitalist modes of urban (re)development poses a challenge to sustainable industrial heritage-led redevelopment in China.
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