China’s rapid economic growth following the 1978 reforms has resulted in significant economic, social and environmental change. These reforms and their outcomes have been subjected to considerable scrutiny. However, relatively little research has been directed towards the relationship between the changing role of local government, which has itself been subject to substantial restructuring, and the local mediation of the social and environmental impacts of rapid economic growth. This paper investigates the local manifestation of social and environmental change in Zhejiang Province. In particular, it considers the changing role of local government in the regulatory process, and features a case study of Huzhou Municipality. A synthesis of the factual knowledge and perceptions of 48 key-informants from government and public institutions and rural industries is used as the platform for an analysis of the changing nature of local regulation with respect to the provision of key public services (health care and education) and environmental protection (water pollution control). The results reveal the ability of local government to selectively implement national and provincial policies in light of local priorities, which is taken as indicative of the emergence of local agency within local development processes. The case study suggests a need to re-evaluate conventional wisdom on the absence of autonomy at local levels of government in China, particularly as it relates to the continued devolution of administrative responsibility and the emergence of increasingly powerful economic interests.