The development since the late 1970s of four Special Economic Zones in South China, in which a variety of economic change is being piloted, has now been widely documented. These zones have certain similarities with Export Processing Zones in some other countries within Southeast Asia, although they are more comprehensive in development and include the provision of housing for foreigners and local Chinese, as well as social services and many other facilities. Housing and service provision has, to an extent, however, lagged behind the economic and physical development of the Chinese zones. The authorities in the zones have begun to view housing as an item worthy of investment, and the coexistence of foreign firms and joint ventures with Chinese-owned undertakings within the zones has meant that incomes and aspirations, and hence demands for facilities, are often higher than elsewhere in the country. This has meant an important re-examination of socialist principles in the zones. Housing in particular is becoming a commodity which is of higher quality than elsewhere in China and can be bought and sold, and many types of social and retail services are also being provided by individuals and firms rather than by the state or larger production units. In this paper the authors examine some of the changes currently being witnessed in these zones and the dilemmas which they pose for a government still attempting to maintain an avowed socialist orientation in its policy. In particular, they discuss the emergence of competition for housing and resources, and consider the extent to which the commodification of social facilities is compatible with the continuation of socialist state policy.