Shangbu Industrial District (SID) is the first industrial district in China that has successful been regenerated into a major commercial and retailing centre. First developed in the 1980s for industrial development, the SID faced the hallowing out of industries in the early 1990s as a result of rapid economic and spatial restructuring in China's regional economy. The expanding residential population, the consequent needs for retailing activities, and the encroachment of the SID by commercial activities have “gentrified” the deindustrializing District into a retailing centre. Successful regeneration of the SID can be attributed first to the failure of the early socialist market economy to anticipate consumption and retailing needs of a growing population. Another reason, ironically, is the weak enforcement of regulations on the emerging land market and land use changes at the Municipal level. The regeneration process generates interesting dynamics and conflicts among the Municipal and District Governments. primary land users, tenants and consumers. This case illustrates that while globalization, economic and spatial restructuring seem to be the universal forces in regenerating cities, the outcome is more of a function of the interplay of various socio-economic and political factors in a specific context.