This study examines the recalibration of local-level rural e-commerce in China’s New Era political economy. Drawing on fieldwork in three Yunnan counties, this study explores the effects of recalibration on China’s platform giants. We find that the dysfunctional local developmental state—shown as a shift in a diminished developmental drive mainly focused on noneconomic goals, the preferential treatment of local state-backed firms over private platform giants in industrial policy, the digital literacy-poor local bureaucracy, and the alienation of e-commerce firms of all sizes—leads to the misalignment between China’s increasingly security-centric state capitalism and profit-driven platform giants. This misalignment partly contributes to the deceleration of China’s platform economy.