The article explores the divergent patterns of farmland property rights transformation in Suzhou and Dongguan. China, investigates the relevant factors influencing this divergence from an institutionalist perspective. We point out that a local property rights regime based on the collective ownership system coupled with developmental dynamics at village level has made the transformation of farmland property rights in Dongguan different from that in Suzhou. We also discover some emerging local institutions that may have been factors in the variation of farmland property rights transformation between these two regions. Furthermore, we observe that such spatial-institutional variation influences the welfare of local farmers to a significant degree. Finally, this study suggests that in addition to the ”economic paradigm,” scholars might pay more attention to political factors such as intra-Party promotion/evaluation systems, the tensions between the evaluative indicators systems maintained by the tiao (central/local sectoral command) and the kuai (territorial jurisdictions), and the regulation as well as political governance of government-village relations in order to further understand the dynamics and contradictions of China's local development.