This paper argues that before 1978, the Chinese state, a "police state" in the Foucauldian concept of governmentality, aimed at total administration of the economy and society. Central investments determined local spatial development. Economic reforms and administrative decentralization after 1978 allowed local authorities to pursue their own development, leading to many planning problems. To regain control over spatial development, the state now employs urban system planning to regulate development in city regions. The Pearl River Delta Urban System Plan (PRDUSP) is a case in point. To overcome myopic regional development and environmental issues, the PRDUSP lays out a development strategy in which cities are organized into hierarchies around three metropolitan areas, have different functions, and are connected by development and growth axes. Various measures and policies also are recommended. All these suggest that the Provincial Government of Guangdong is searching for a new way of regional governance. [Key words: urban system planning, Pearl River Delta, China, governmentality, regional governance.] This paper investigates the relationship between urban system planning, the built environment, and the state in China, a subject that has never been investigated or debated seriously (Tang, 1998). Research on urban system planning in China frequently focuses on the ideal urban hierarchy, as seen through the dominant political lens in different periods of time: (1) the perspective of central planning or the "leftist" ideology before the initiation of economic reforms in 1978; and (2) the principle of economic efficiency after 591 has been done on how urban system planning actually is done, not to mention its theoretical basis. Kirkby (1985) summarized the academic debates during the early 1980s on whether large or small cities should be preferred. However, his work is largely descriptive and lacks a spatial perspective. His discussion also is not situated within the context of state governance, which has undergone dramatic changes in the last decade. Solinger (1993) attempted to view the economic reforms from the statist perspective. Nevertheless, as Perry (1994) argued, Solinger relied too much on an unnecessarily rigid state-society dichotomy. Moreover, Solinger's work has little to offer in terms of a better understanding of planning knowledge and practice.In order to understand the relationship between the built environment, urban system planning, and the Chinese state, we have to develop a new perspective. It is in this context that we find Foucault's concept of governmentality (Foucault, 1991;Tang, 1997a) useful. Foucault rejected a perspective concentrating on state institutions. Instead, he focused on the identification of programs and practices of rules in micro-settings. The strategy to understand the practice of the state is to decompose power into two lines of investigation: one includes political rationalities and programs of government, the other emphasizes technologies and techniques of government. T...