China’s achievement of developing a vigorous market economy is based on Chinese communist party (CCP)’s top-down reform and opening-up policies since 1978. Meanwhile, political reform of the second largest economy in today’s world is continuously delayed. Without an agenda of bringing democracy and regulation-making process into workplaces, China’s state-owned enterprises were swiftly transformed to be profit-oriented economic entities with managerial supremacy. As an authoritarian regime still run by communist party, China has to negotiate with its own socialist tradition, which entails not only restructuring labour relations in workplaces but its national ideology. This study explores Chinese Communist Party’s (CCP) politics of labour management in China’s local state sector. With use of multiple qualitative inquiring techniques, the study selects two state-owned corporations located in Shanghai region as cases, and provides an in-depth analysis on Chinese Communist Party’s (CCP) politics of managing labour force formulation as well as re-shaping employment relationship within those transitioning SOEs. The study is expected to illuminate the diversity within and across regions and industrial sectors in China. Also, these case studies suggest that CCP adopts pragmatic approaches over labour managing matters so as to ensure its sovereign influence. I will argue that the key to understand SOEs’ management rebuilding is CCP’s governing tradition of co-option and elite selection, which is a prolong legacy that has shaped the party’s personnel managing system since revolutionary era. It is also hoped that the findings of my empirical research will lead to theoretical discussion on China’s path of industrial relations in future: if such dynamic managerialism in the state sector is able to guarantee further delays of workplace political liberalisation of labour relation, or not