The emergence of new institutions is critical if the Chinese Communist Party (CCP) is to transform itself from a traditional Leninist party, exercising highly concentrated authority and mobilizing populations, to a more modern, administrative party that follows procedures and adheres to rules. Whether such a transformation is successful in the long run, efforts in this direction are slowly reshaping power at the local level in China. To the extent such efforts are successful, they have the potential to reduce social conflict and make local governance more effective. Success is far from guaranteed. Nevertheless, in the interest of better understanding the transformation of local governance, this article looks at two instances of institutional innovation: the “one mechanism, three transformations” adopted in Handan, Hebei Province, and the “permanent representative system” as adopted in Ya’an, Sichuan Province.