An extensive body of literature documents large-scale property-led redevelopment in the world and in China. However, in recent years China has seen the policy shift toward small-scale redevelopment, heritage preservation, and public participation in the regeneration process. Using the pilot project of "micro-regeneration" (weigaizao) in Guangzhou, this paper critically examines these aspects of change. We find that such a policy shift is attributed to increasing social contestations generated by large-scale redevelopment. The state uses heritage preservation to develop creative and cultural industries, which transforms the traditional neighborhood into a commercial and tourist quarter. The policy also encourages participation in urban redevelopment. However, residents still have limited influence over the course of redevelopment. The paper argues that micro-regeneration is a practice of worlding cities in the Chinese institutional context, involving the state dealing with the problems of redevelopment through new governance approaches.