ABSTRACT This article addresses the policy intents regarding inclusive education in the Chinese basic education sector, prestigious school principals’ and teachers’ understanding of inclusion, and their current enactment of inclusion in delivering education. Through document analysis and semi-structured interviews, we find that inclusion in China can be understood in two broad categories. One concerns even development and equal access to educational opportunities between regions of different economic development, while the other concerns equal rights and educational opportunities between students with special educational needs and students in regular classrooms. In terms of enactment, the teachers and principals at the prestigious schools sampled focus on different issues to those highlighted in policy documents. Inclusion is often discussed in relation to competition, quality, and outcomes in the schools, rather than access to education and the learning process. When it comes to inclusion criteria, prestigious schools substantively exert their influence to exclude certain students, due to their self-image of excellence. However, based on the ideology of human capital theory, excellence and equity are not seen as incompatible goals in the Chinese educational system.