In the era of state socialism under Mao, land in China was treated as a means of production and was allocated administratively by the state free of charge. To accommodate the interests of foreign investors without violating the socialist principle of public ownership, the Chinese state has, since the 1980s, separated land use rights from land ownership and opened up a new market track for the conveyance of land use rights to commercial users. The result has been a distinct dual-track land system in the new political economy, characterized by significant asymmetry for arbitrage. Discrepancy between the state's intention and actual outcome has been a consequence of the internal diversity of power relations concerning land development. Our data analysis reveals that the loss of farmland to nonagricultural developments has slowed down in recent years, that the state's intention to increase land use efficiency has been severely compromised by the socialist legacy, and that illegal activities are pervasive. The Chinese socialist state is better seen as a dynamic, complex, heterogeneous, and self-conflictual institutional ensemble in and through which the forces and interests of different levels of the state are contested, negotiated, and mediated.