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This article argues that the usefulness of action research hinges on a heightened sensitivity towards its relevance and irrelevance to social, economic and cultural environments in which the professional action researchers conduct their research. Its contribution to transforming social situations depends on how well the researchers can bring the different stakeholders of the local community together to learn about themselves and each other, and identify and find ways to address the implicit barriers to the effective use of action research. We also argue that it is this contribution that distinguishes action research from other approaches of social development in China. We draw from the lessons learned during one of our action research projects conducted in China with a focus on seeking effective strategies in dealing with the unemployment problem of middle-aged women workers. The researchers played the role of change agents to encourage participatory negotiation between the local officials and the women.