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Recently the Chinese government has been actively collaborating with nonprofit nongovernmental organizations to provide social welfare services to older adults at the community level. The role played by NGOs in facilitating governance has only recently gained attention in the literature on Chinese NGOs and urban governance. Addressing this gap, the paper advances geographers' understanding of State–NGO collaborations in facilitating urban governance in the Chinese context using fieldwork in Beijing and Shanghai on the provision of community eldercare services as an example. It also explains the political control of these NGOs and their changing role in the eldercare market. We argue that collaborations between the state and NGOs in China have gradually transferred eldercare services to the NGOs, and led to a fragmented welfare system, which, as a consequence, has facilitated entrepreneurial urban governance. The paper sheds light on community-based organizations, their collaboration with local governments, and how they have become not only welfare providers but a significant site for social control. [ABSTRACT FROM AUTHOR]