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Embedding the program of elderly care into community-based service system seems to imply that China is reorganising capacities of neighbourhood governance. The program, created by transformation of neighbourhood governance, represented the state government’s frustration with the institutional embodiment of neoliberalism. However, stimulating neighbourhood organisations in elderly care service through involvement of market instruments demonstrated the neoliberal approach. In this study, we provided a research framework in the context of embedded neoliberalism to explore the dilemma of neighbourhood governance in China. By interviewing 100 elderly people in five neighbourhoods in Nanjing, China, we examined the home-based elderly care (HEC) model to analyse the changes in socio-spatial relationships of neighbourhoods. We argued that the state-organised system of market instruments as a form of neighbourhood system weaken the spontaneity of elderly residents in developing social capitals. Moreover, the emerging program is struggling to operate because the devolution of conservative governance capacity from the state to the neighbourhood does not provide resources, leading to the restrained market provision. Thus, this transformation of neighbourhood governance can only be effective if there is a clear complementarity relationship between the role of state and market instruments. The attention of further studies on neighbourhood governance needs to re-examine the reciprocal relationships in the context of declining neoliberalism.

China’s “Embedded Neoliberal” Home-Based Elderly Care? A State-Organised System of Neighbourhood Governance